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In: Accounting

Lean Accounting Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a...

Lean Accounting

Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $32. The budgeted conversion cost for the year is $81,000 for 1,500 production hours. A unit of Style Omega requires 18 minutes of cell production time. The following transactions took place during June:

  1. Materials were acquired to assemble 690 Style Omega units for June.
  2. Conversion costs were applied to 690 Style Omega units of production.
  3. 640 units of Style Omega were completed in June.
  4. 600 units of Style Omega were sold in June for $90 per unit.

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

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.
2.
3.
4. Sale
4. Cost

Solutions

Expert Solution

Answer

ans a

Budgeted cell conversion cost per hour
81000/1500 $54 per hour
ans b
Conversion cost per unit $16 per unit
54*18/60
ans c
Tran Accounts title Dr Cr
1 Work In process Inventory $     22,080
Raw material (690*32) $     22,080
2 Work In process Inventory $     10,240
Conversion cost $     10,240
(640*16)
3 Finished Goods Inventory $     30,720
Work In process Inventory $     30,720
640*(32+16)
4 Accounts receivable (600*90) $     54,000
Sales $     54,000
Cost of good sold $     28,800
Finished Goods Inventory $     28,800
600*(32+16)

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