Question:Runcke Motor Company manufactures automobiles. During September 2011 the companypurchased 5,000 head lamps at a cost of $9 per lamp. Runcke withdrew 4,650 lamps from thewarehouse during the month. Fity of these lamps were used to replace the head lamps in autosused by traveling sales staff. The remaining 4,600 lamps were put into autos manufacturedduring the month. Of the autos put into production during September 2011, 90% were completed and transferredto the company's storage lot. Of the cars completed during the month, 75% were sold bySeptember 30.Instructions:(a) Determine the cost of head lamps that would appear in each of the following accounts atSeptember 30, 2011: Raw Materials, Work in Process, Finished Goods, Cost of Goods Sold,and Selling Expenses. Solution: Computation of the Raw Materials, Work in Process, Finished Goods, Cost of Goods Sold, and Selling ExpensesGiven informationHead Lamps Purchased5,000 Head Lamps drawn from Inventory4,650 Head Lamps Remaing in Inventory350 Cost per head lamp9
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Supply chain management terms, Finished Goods, head lamps, Finished Goods Autos, head lamp Cost