The Kwanika Co During January, Material for 8,400 Units Was Purchased on Account

question 43

Essay

The Kwanika Co. operates in a lean manufacturing environment. During its first year of operations, Kwanika budgeted for 40,000 hours in the production of 100,000 units in its cell X-22. Material costs were $7 per unit. Cell X-22 conversion costs were budgeted for the year as follows: $\begin{array}{ll}\text { Direct and indirect labor } & \$ 900,000 \\\text { Machine depreciation } & 125,000 \\\text { Maintenance and supplies } & 375,000 \\\text { Utilities } & 225,000\\\text { Total }&\$1,625,000\end{array}$ During January, material for 8,400 units was purchased on account. There were 8,200 units manufactured and 8,000 were sold shipped to customers for $35 each. Journalize: a) the material purchases; b) the application of conversion costs; c) the transfer from work in process to finished goods; and d) the sales were made on account) and associated cost of goods sold for the month of January.

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Definitions:

Decision-making Effectiveness

The quality of achieving a desired outcome efficiently through making informed decisions.

Storming

A phase in group development characterized by conflict and competition as team members clarify their roles and expectations.

Process Gains

Factors that contribute to team effectiveness.

Synergy

The concept that the total amount of work produced by a team is greater than the amount of work produced by individual members working independently.