The Lim Company has a plant that manufacturers transistor radios. The just-in- production time is only...

 

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The Lim Company has a plant that manufacturers transistor radios. The just-in- production time is only a few minutes per unit. The company uses a Exercise time production system and a backflush costing system with two trigger points for journal entries: Purchase of direct (raw) materials • Completion of good finished units of product · There are no beginning inventories. The following data pertain to April manufacturing: Direct (raw) materials purchased Direct (raw) materials used Conversion costs incurred Allocation of conversion costs Costs transferred to finished goods Cost of goods sold P8,800,000 8,500,000 4,220,000 4,000,000 12,500,000 11,900,000 Required: 1. Prepare summary journal entries for April (without disposing of under- or overallocated conversion costs). Assume no direct materials variances. 2. Post the entries in requirement 1 to T-accounts for applicable Inventory Control, Conversion Costs Control, Conversion Costs Allocated and Cost of Goods Sold. 3. Under an ideal JIT production system, how would the amounts in your journal entries differ from those in requirement 1? Exercise 3 (JIT purchasing, choosing suppliers) The Donnie Corporation and the Thea Corporation manufacture fairly similar remote-controlled toy cars. The Tristan Corporation, a retailer of children's toys, expects to buy and sell 4,000 of these cars each year. Both Donnie and Thea can supply all of Tristan's needs, and Tristan prefers to use only on supplier for these cars. An electronic hookup will make ordering costs negligible for either supplier. Tristan wants 80 cars delivered 50 times each year. Tristan obtains the following additional information. The Lim Company has a plant that manufacturers transistor radios. The just-in- production time is only a few minutes per unit. The company uses a Exercise time production system and a backflush costing system with two trigger points for journal entries: Purchase of direct (raw) materials • Completion of good finished units of product · There are no beginning inventories. The following data pertain to April manufacturing: Direct (raw) materials purchased Direct (raw) materials used Conversion costs incurred Allocation of conversion costs Costs transferred to finished goods Cost of goods sold P8,800,000 8,500,000 4,220,000 4,000,000 12,500,000 11,900,000 Required: 1. Prepare summary journal entries for April (without disposing of under- or overallocated conversion costs). Assume no direct materials variances. 2. Post the entries in requirement 1 to T-accounts for applicable Inventory Control, Conversion Costs Control, Conversion Costs Allocated and Cost of Goods Sold. 3. Under an ideal JIT production system, how would the amounts in your journal entries differ from those in requirement 1? Exercise 3 (JIT purchasing, choosing suppliers) The Donnie Corporation and the Thea Corporation manufacture fairly similar remote-controlled toy cars. The Tristan Corporation, a retailer of children's toys, expects to buy and sell 4,000 of these cars each year. Both Donnie and Thea can supply all of Tristan's needs, and Tristan prefers to use only on supplier for these cars. An electronic hookup will make ordering costs negligible for either supplier. Tristan wants 80 cars delivered 50 times each year. Tristan obtains the following additional information.