Question

Lean Accounting

Vintage Audio Inc. manufactures audio speakers. Each speaker requires $100 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for the period:

Speaker assembly cell, estimated costs:
Labor	$39,660
Depreciation	5,320
Supplies	1,930
Power	1,450
Total cell costs for the period	$48,360

The operating plan calls for 155 operating hours for the period. Each speaker requires 15 minutes of cell process time. The unit selling price for each speaker is $271. During the period, the following transactions occurred:

1. Purchased materials to produce 495 speaker units.
2. Applied conversion costs to production of 470 speaker units.
3. Completed and transferred 450 speaker units to finished goods.
4. Sold 430 speaker units.

There were no inventories at the beginning of the period.

a. Journalize the summary transactions (1)-(4) for the period. Do not round interim calculations.

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

b. Determine the ending balance of raw and in process inventory and finished goods inventory.

Raw and In Process Inventory, ending balance	$
Finished Goods Inventory, ending balance	$

Answer 1

Budgeted cell conversion cost per hour	312	per hour	=48360/155
Budgeted cell conversion cost per unit	78	per unit	=312*15/60
a
Raw and in process inventory	49500		=495*100
Accounts Payable		49500
Raw and in process inventory	36660		=470*78
Conversion costs		36660
Finished goods inventory	80100		=450*(100+78)
Raw and in process inventory		80100
Accounts Receivable	116530		=430*271
Sales		116530
Cost of goods sold	76540		=430*(100+78)
Finished goods inventory		76540
b
Raw and In Process Inventory, ending balance	6060		=49500+36660-80100
Finished Goods Inventory, ending balance	3560		=80100-76540