13.7 Lean Accounting

Power Audio Inc. manufactures audio speakers. Each speaker requires $52 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for the period:

Line Item Description	Amount
Labor	$30,000
Depreciation	12,000
Supplies	6,000
Power	2,000
Total cell costs for the period	$50,000

The operating plan calls for 800 operating hours for the period. Each speaker requires 12 minutes of cell process time. The unit selling price for each speaker is $60. During the period, the following transactions occurred:

1. Purchased materials to produce 2,000 speaker units.
2. Applied conversion costs to production of 1,800 speaker units.
3. Completed and transferred 1,800 speaker units to finished goods.
4. Sold 1,600 speaker units.

There were no inventories at the beginning of the period.

Question Content Area

a. Journalize the summary transactions (1)(4) for the period. If an amount box does not require an entry, leave it blank.

Transaction	Account	Debit	Credit
1.	Raw and In Process Inventory
	Accounts Payable
2.	Raw and In Process Inventory
	Conversion Costs
3.	Finished Goods Inventory
	Raw and In Process Inventory
4. Sale	Accounts Receivable
	Sales
4. Cost	Cost of Goods Sold
	Finished Goods Inventory

Question Content Area

b. Determine the ending balance of Raw and In Process Inventory and Finished Goods Inventory. Raw and In Process Inventory, ending balance $? Finished Goods Inventory, ending balance $?