1. Determine the cost of batteries that would appear in each of the following accounts on April 30.
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The Devon Motor Company produces automobiles. On April 1, the company had no beginning inventories, and it purchased 8,000 batteries at a cost of $80 per battery. It withdrew 7,600 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 The remaining 7,500 batteries withdrawn from the storeroom were placed in cars being produced by the company.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 30.
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1. Determine the cost of batteries that would appear in each of the following accounts on April 30.
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- The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 8,000 batteries at a cost of $80 per battery. It withdrew 7,600 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 The remaining 7,500 batteries withdrawn from the storeroom were placed in cars being produced by the company.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.a. Raw Materialsb. Work in Processc. Finished Goodsd. Cost of Goods Solde. Selling Expense2. Specify whether each of the above accounts would appear on the balance sheet or on the income statement at the end of the month.The Devon Motor Company produces automobiles. On April 1, the company had no beginning inventories, and it purchased 7,060 batteries at a cost of $130 per battery. It withdrew 6,500 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars used by the company's traveling sales staff. The remaining 6,400 batteries withdrawn from the storeroom were placed in cars being produced by the company.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 30. Required: 1. and 2. Determine the cost of batteries appearing in each of the following accounts on April 30 and select whether each of the accounts would appear on the balance sheet or on the income statement. Name of the Account Cost Appears on: Raw Materials $ 560 Balance Sheet Work in Process Finished Goods Cost of Goods Sold Selling ExpenseThe Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 5,630 batteries at a cost of $60 per battery. It withdrew 5,200 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 5,100 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. Name of the Account Cost 1a Raw Materials 25,800 Work in Process 30,600 82.620 192,780 1b 1c Finished Goods Cost of Goods Sold Seling Expense 1d 1e 6.000
- The Devon Motor Company produces motorcycles. During April, the company purchased 8,000 batteries at a cost of $10 per battery. Devon withdrew 7,600 batteries from the storeroom during the month. Ofthese, 100 were used to replace batteries in motorcycles used by the company’s traveling sales staff. Theremaining 7,500 batteries withdrawn from the storeroom were placed in motorcycles being produced bythe company. Of the motorcycles in production during April, 90% were completed and transferred fromwork in process to finished goods. Of the motorcycles completed during the month, 30% were unsold atApril 30.There were no inventories of any type on April 1.Required:1. Determine the cost of batteries that would appear in each of the following accounts at April 30:a. Raw Materials.b. Work in Process.c. Finished Goods.d. Cost of Goods Sold.e. Selling Expense.2. Specify whether each of the above accounts would appear on the balance sheet or on the incomestatement at April 30.Servix, Inc., produces water pumps. Each water pump contains a small valve that costs $ 5. During May, 600 valves were drawn from the supply room and installed in water pumps in the production process. Eighty percent of these units were completed and transferred into finished goods warehouses. Of the units completed, thirty percent were still unsold at the end of the month. There were no beginning inventories. 52.The cost of valves in cost of goods sold for May would be: a. $1,680 b. $2,100 c.$900 d. $72Harold Manufacturing produces denim clothing. This year, it produced 5,280 denim jackets at a manufacturing cost of $41.00 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives for these jackets. 1. Jackets can be sold to a secondhand clothing shop for $7.00 each. 2. Jackets can be disassembled at a cost of $32,800 and sold to a recycler for $11.00 each. 3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,280 jackets into only 3,050 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $101,400, but the jackets can then be sold for their regular price of $41.00 each. Required: 1. Calculate the incremental income. Incremental revenue Incremental costs Incremental income Alternative 1 Sell to a second- hand shop Alternative 2 Disassemble and sell to a recycler…
- Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 40,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February March April May June July 34,750 28,750 30,250 35,800 32,400 44,360 Parts are purchased at a wholesale price of $55. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 42,500 parts in January. Required: a. Estimate purchases of the component (in units) for February and March. b. Estimate the cash disbursements…Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 31,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February March 32,500 26,500 April May 28,000 33,550 June July 30,150 42,110 Parts are purchased at a wholesale price of $46. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 38,000 parts in January. Required: a. Estimate purchases of the component (in units) for February and March. b. Estimate the cash disbursements…Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 31,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February 32,500 March 26,500 April 28,000 May 33,550 June 30,150 July 42,110 Parts are purchased at a wholesale price of $46. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 38,000 parts in January. Required: Estimate purchases of the component (in units) for February and March. Estimate the cash…
- SophCO Inc. is a distributor of linseed oil which is used in the manufacture of paint. The companybuys linseed oil in bulk from a number of different linseed crushing plants. At the beginning ofmonth of September the company had 25,000 gallons of linseed oil stored in its tank farm. Thelinseed oil was purchased from one crushing plant at a cost of $3.00. During the month ofSeptember the company purchased additional linseed oil and sold linseed oil as follows.9/3/XX purchased 10,000 gallons of linseed oil at $3.25 per gallon.9/8/XX purchased 15,000 gallons of linseed oil at $3.50 per gallon9/10/XX purchased 5,000 gallons of linseed oil at $3.60 per gallon.9/11/XX sold 22,000 gallons to a paint manufacture for $5.00 per gallon.9/12/XX purchased 20,000 gallons of linseed oil at $3.75 per gallon.9/22/XX purchased 5,000 gallons of linseed oil at $3.80 per gallon.9/30/XX sold 28,000 gallons of linseed oil for $5.20.Required:a. Complete the perpetual inventory record (provided) for the above…McCrane Motor Company manufactures automobiles. During September 2020, the company purchased 9,000 head lamps at a cost of $10 per lamp. 70 of these lamps were used to replace the head lamps in autos used by traveling sales staff, and 8,300 lamps were put in autos manufactured during the month.Of the autos put into production during September 2020, 80% were completed and transferred to the company’s storage lot. Of the cars completed during the month, 70% were sold by September 30.(a)Determine the cost of head lamps that would appear in each of the following accounts at September 30, 2020: Raw Materials, Work in Process, Finished Goods, Cost of Goods Sold, and Selling Expenses.Hip Manufacturing produces denim clothing. This year it produced 3,140 denim jackets at a cost of $94,200. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $18,840. 2. Jackets can be disassembled at a cost of $6,280 and sold to a recycler for $37,680. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $106,760, and the jackets can then be sold for $141,300. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework