Lean Accounting: Com-Tel Inc. manufactires and assembles two models of smart pho

Question

Lean Accounting:

Com-Tel Inc. manufactires and assembles two models of smart phones- the Tiger Model and the Lion Model. The process consist of a lean cell for each product. The data that follow concern only the Lion Model lean cell.

Forthe 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

4,Total. $172,800

Com-Tel plans 2,400 hours of production for the Lion Model cell for the year. The material cost is $61 per unit. Each assembly requires 24 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 th Lion Model cell during May:

A. Electronic parts were puchased to produce 8,150 Lion Model assemblies in May.

B. Coversion cost 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 answer to the nearest cent.

Required:

1 determine the budgeted cell conversion cost per hour. $. Per hour

2 determine the budget cell conversion cost per unit. $. Per unit

3. Journalist the summary transactions (a)through (d)

A

B

C

D sales

D cost

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

Raw and in Process Inventory. $

Finished Good Inventory. $

5 lean accounting is different from traditional accounting because it is more___ and uses___ control. As a result, the nmber of transactions are___. In many lean operations, purchased materials are charged to a_____. Direct labor is frequently___. Often, non financial performance measures, such as___,are used to monitor performance

Explanation / Answer

1. Budgeted cell conversion cost per hour = $172800/2400 hours = $72 per hour

2. Budgeted cell conversion cost per unit = $172800/6000 = $28.80 per unit

Number of units assembled = (2400 hours x 60)/24 minutes = 144000 mins/24 mins = 6000 units

3.

4. Raw and In process inventory: $497150 + $223200 - $682480 = $37870

Finished Goods Inventory: $682480 - $661826 = $20654

Per Chegg guidelines, 4 sub-parts have been answered.

a. Raw and In Process Inventory 497150 Accounts Payable (8150 x $61) 497150 b. Raw and In Process Inventory 223200 Conversion Costs (7750 x $28.80) 223200 c. Finished goods inventory [7600 x ($61 + $28.80)] 682480 Raw and In process inventory 682480 d. Sale Accounts receivable (7370 x $288) 2122560 Sales 2122560 d. Cost Cost of goods sold [7370 x ($61 + $28.80)] 661826 Finished goods inventory 661826

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