The Devon Motor Company produces automobiles. On April 1st the company had no be

Question

The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 6,070 batteries at a cost of $85 per battery. It withdrew 5,600 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars being used by the company’s traveling sales staff. The remaining 5,500 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30th.

Required:

1. Determine the cost of batteries that would appear in each of the following accounts on April 30th.

Raw Materials ________

Work In Process________

Finished Goods________

Cost of Goods Sold_________

Selling Expense____________

Explanation / Answer

Total batteries Purchased 6070 units Lesss: Issued during the year 5600 units Raw material inventory in hand 470 units Cost of raw material inventory@85 $39,950 Issued from Store room 5600 units Less: Issued for production 5500 units Issued to Travelling sales person 100 units Selling expense 100 units@85 $8,500 Issued to production 5500 units Less: 90% completed 4950 unts Closing WIP Inventroy 550 units Cost of WIP inventory@85 $46,750 Completed in Production 4950 Units Less: Unsold during the year@30% 1485 units Sold Units 3465 units Cost of Goods Sold $294,525 Cost of Finished Goods inventory 1485 units@85 $126,225 Raw material 39950 Work in process 46750 Finished Goods 126225 Cost of Goods sold 294525 Selling expense 8500

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