Question

Lean Accounting (Requirement 3 at the bottom!)

Com-Tel Inc. manufactures and assembles two models of smartphones—the Tiger Model and the Lion Model. The process consists of a lean cell for each product. The data that follow concern only the Lion Model lean cell.

For the year, Com-Tel Inc. budgeted these costs for the Lion Model production cell:

Conversion Cost Categories		Budget
Labor		$139,400
Supplies		52,800
Utilities		19,000
Total		$211,200

Com-Tel plans 3,200 hours of production for the Lion Model cell for the year. The materials cost is $56 per unit. Each assembly requires 18 minutes of cell assembly time. There was no May 1 inventory for either Raw and In Process Inventory or Finished Goods Inventory.

The following summary events took place in the Lion Model cell during May:

1. Electronic parts were purchased to produce 10,900 Lion Model assemblies in May.
2. Conversion costs were applied for 10,350 units of production in May.
3. 10,140 units were completed and transferred to finished goods in May.
4. 9,840 units were shipped to customers at a price of $264 per unit.

If required, round your answers to the nearest cent.

Required:

1. Determine the budgeted cell conversion cost per hour.

$ per hour

2. Determine the budgeted cell conversion cost per unit.

$ per unit

4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory.

Raw and In Process Inventory	$
Finished Goods Inventory	$

3. Journalize the summary transactions (a) through (d). If an amount box does not require an entry, leave it blank. Raw and In Process Inventory . Accounts Payable b. Raw and In Process Inventory Conversion Costs Finished Goods Inventory Raw and In Process Inventory 4. Sale Accounts Receivable Sales 4. Cost Cost of Goods Sold Finished Goods Inventory

Answer 1

1
Budgeted cell conversion cost per hour	66.00	per hour	=211200/3200
2
Budgeted cell conversion cost per unit	19.80	per unit	=66*(18/60)
3
Raw and in process inventory	610400		=10900*56
Accounts Payable		610400
Raw and in process inventory	204930		=10350*19.80
Conversion costs		204930
Finished goods inventory	768612		=10140*(56+19.80)
Raw and in process inventory		768612
Accounts Receivable	2597760		=9840*264
Sales		2597760
Cost of goods sold	745872		=9840*(56+19.80)
Finished goods inventory		745872
4
Raw and In Process Inventory	46718		=610400+204930-768612
Finished Goods Inventory	22740		=768612-745872