Question

Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $135. The budgeted conversion cost for the year is $180,600 for 2,150 production hours. A unit of Style Omega requires 15 minutes of cell production time. The following transactions took place during June: 1. 2. 3. 4. Materials were acquired to assemble 600 Style Omega units for June. Conversion costs were applied to 600 Style Omega units of production. 585 units of Style Omega were completed in June. 575 units of Style Omega were sold in June for $186 per unit Required: a. Determine the budgeted cell conversion cost per hour. b. Determine the budgeted cell conversion cost per unit. c. Journalize the summary transactions (1)-(4) for June. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS Modern Lighting Inc. General Ledger

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Answer #1
ans a
Budgeted cell conversion cost per hour
180600/2150 $84 per hour
ans b
Conversion cost per unit $21 per unit
84*15/60
ans c
Transation Accounts title Dr Cr
1 Work In process Inventory 81000
Raw material (600*135) 81000
2 Work In process Inventory 12285
Conversion cost 12285
(585*21)
3 Finished Goods Inventory 91260
Work In process Inventory 91260
585*(135+21)
4 Accounts receivable (575*18) 106950
Sales 106950
Cost of good sold 89700
Finished Goods Inventory 89700
575*(135+21)
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