Robo-Lawn is a lean manufacturer of robotic lawn mowers. Each mower requires $250 of raw materials. Estimated conversion costs to produce 2,000 units in the next year are $800,000. During a recent quarter, the company produced 600 mowers and sold 580 mowers. Each mower is sold for $1,000.
Required
1. Compute the conversion cost rate per mower.
2. Prepare journal entries to record
(a) Purchase of raw materials on credit,
(b) Applied conversion costs to production,
(c) Sale of mowers on credit,
(d) Cost of goods sold and finished goods inventory.
