Questions:
Flores Company manufactures cell phones and uses JIT costing. The standard unit cost is $30 is comprised of $20 direct materials and $10 conversion costs. Direct materials purchased on account during June totaled $2,500,000. Actual conversion costs totaled $1,100,000. Flores completed 100,000 cell phones in June and sold 98,000.
Requirements
1. Journalize these transactions.
2. Were conversion costs under- or over allocated? Hint: You may want to prepare a T-account for the Conversion costs account. Explain your answer and then make the entry to close the Conversion costs account.
3. What is the ending balance of the Raw and in-process inventory account? How much Cost of goods sold did Flores have in June?