Lean Accounting
Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $34. The budgeted conversion cost for the year is $172,800 for 3,200 production hours. A unit of Style Omega requires 12 minutes of cell production time. The following transactions took place during June:
a. Determine the budgeted cell conversion cost
per hour. If required, round to the nearest
cent.
$ per hour
b. Determine the budgeted cell conversion cost
per unit. If required, round to the nearest
cent.
$ per unit
Feedback
a. Budgeted conversion cost ÷ Planned hours of production = Cell Conversion cost per hour
b. (Cell process time ÷ 60 minutes) x Conversion rate from Req. (a) = Cell Conversion cost per unit
c. Journalize the summary transactions (1)–(4) for June. If required, round your answers to one decimal place. If an amount box does not require an entry, leave it blank.
1. | Raw and In Process Inventory | ||
Accounts Payable | |||
2. | Raw and In Process Inventory | ||
Conversion Costs | |||
3. | Finished Goods Inventory | ||
Raw and In Process Inventory | |||
4. Sale | Accounts Receivable | ||
Sales | |||
4. Cost | Cost of Goods Sold | ||
Finished Goods Inventory |
a | |||
Budgeted cell conversion cost per hour | 54.00 | per hour | =172800/3200 |
b | |||
Budgeted cell conversion cost per unit | 10.80 | per unit | =54*(12/60) |
c | |||
Raw and in process inventory | 26180 | =770*34 | |
Accounts Payable | 26180 | ||
Raw and in process inventory | 8316 | =770*10.80 | |
Conversion costs | 8316 | ||
Finished goods inventory | 32256 | =720*(34+10.80) | |
Raw and in process inventory | 32256 | ||
Accounts Receivable | 60300 | =670*90 | |
Sales | 60300 | ||
Cost of goods sold | 30016 | =670*(34+10.80) | |
Finished goods inventory | 30016 |
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