Question

3.Lean Accounting 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 $114,000 Supplies 43,200 Utilities 15,600 Total $172,800 Com-Tel plans 2,400 hours of production for the Lion Model cell for the year. The materials cost is $61 per unit. Each assembly requires 20 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: a.Electronic parts were purchased to produce 8,150 Lion Model assemblies in May. b.Conversion costs were applied for 7,750 units of production in May. c.7,600 units were completed and transferred to finished goods in May. d.7,370 units were shipped to customers at a price of $288 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 3. Journalize the summary transactions (a) through (d). a. Raw and In Process Inventory Accounts Payable b. Raw and In Process Inventory Conversion Costs c. Finished Goods Inventory Raw and In Process Inventory d. Sale Accounts Receivable Sales d. Cost Cost of Goods Sold Finished Goods Inventory 4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory. Raw and In Process Inventory $ Finished Goods Inventory $ 5. Lean accounting is different from traditional accounting because it is more simplified and uses minimal control. As a result, the number of transactions are reduced . In many lean operations, purchased materials are charged to a “raw and in process inventory” account . Direct labor is frequently included as a conversion cost of the cell . Often, nonfinancial performance measures, such as lead time or quality measures , are used to monitor performance. 4. 5. Previous Next

Answer 1

• 1)

  Budgeted cell conversion cost per hour = Budgeted Total Conversion Cost/Production Hour

  Budgeted cell conversion cost per hour = 172800/2400

  Budgeted cell conversion cost per hour = 72

  2)

  Budgeted cell conversion cost per unit = Budgeted cell conversion cost per hour * 20/60

  Budgeted cell conversion cost per unit = 72*20/60

  Budgeted cell conversion cost per unit = 24

3.

Date	Particulars	Debit	Credit
a	Raw and In Process Inventory	$ 497150
	Cash		$ 497150
b	Raw and In Process Inventory	172800
	Mfg OH		172800
c	Finished Goods	7600x(61+20) = 615600
	Raw and In Process Inventory		615600
d	Accounts Receivable	206360
	Sales		206360
e	COGS	449570 (7370x61)
	Finished Goods		449570

• 4)

  Raw and In Process Inventory: = 497150+172800-615600 = 54350

  Raw and In Process Inventory:= 54350

  Finished Goods Inventory: = Beginning+ Cost of good manufactured/transfered - Cost of good sold

  Finished Goods Inventory: = 0 + 615600 - 449570

  Finished Goods Inventory: = 166030

  5)

  In just-in-time accounting, direct labor is frequently eliminated as a cost category and is instead included as a conversion cost of the cell. The cell conversion cost is also applied to the raw and in process inventory account. In addition, indirect labor is indirectly assigned to product cells; thus, less factory overhead is allocated to products.

Please appreciate the efforts, if any amout comes up wrong please let know before rating it. It would probably because of the messed up editing of th question posted. Will try correct it. Thanks