Sifton Electronics Corporation manufactures and assembles electronic motor drive

Question

Sifton Electronics Corporation manufactures and assembles electronic motor drives for video cameras. The company assembles the motor drives for several accounts. The process consists of a lean cell for each customer. The following information relates only to one customer's lean cell for the coming year. Projected labor and overhead, $7,370,000; materials costs, $28 per unit. Planned production included 4,000 hours to produce 27,500 motor drives. Actual production for August was 1,600 units, and motor drives shipped amounted to 1,380 units. From the foregoing information, determine the production costs transferred to Finished Goods during August.

a. $428,800

b. $473,600

c. $369,840

d. $408,480

Explanation / Answer

Costs: Total Direct Material 28.00 A Projected Labor and OH 7370000 B Planned Hours 4000 A/B Per Hour OH 1,842.50 A Planned Motors 27500 B Planned Hours 4000 A/B Motors Per Hour 6.875 A Actual Production 1600 B Motors Per Hour 6.875 A/B Total Standard Hours 232.73 Costs: PU Total Direct Material 28.00 44800 (1600*28) Projected Labor and OH 428800 (Standard Hours*Rate Per OH) (232.73*1842.50) Total Costs 473600 Answer is B

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