Martin Lighting Inc. manufactures lighting fixtures, using just-in-time manufact

Question

Martin Lighting Inc. manufactures lighting fixtures, using just-in-time manufacturing methods. Style BB-01 has a materials cost per unit of $24. The budgeted conversion cost for the year is $107,100 for 2,100 production hours. A unit of Style BB-01 requires 12 minutes of cell production time.

The following transactions took place during October:

a. Determine the budgeted cell conversion cost per hour. Round to the nearest cent.
$ per hour

b. Determine the budgeted cell conversion cost per unit. Round to nearest cent.
$ per unit

c. Journalize the summary transactions (1)-(4) for October.

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c. Journalize the summary transactions (1)-(4) for October.

1. 2. 3. 4. Sale 4. Cost

Explanation / Answer

Conversion Cost 107100 Budgeted Hours 2100 a conversion cost per hour 51 b conversion cost per unit 51*.12/60 10.2 Particulares Dr CR 1 Raw and in process Inventory 680*24 16320 Account Payable 16320 2 Raw and in process Inventory =680*10.2 6936 C0nversion cost 6936 3 Finished Goods 21546 Raw and in process Inventory =630*34.2 21546 4 Cash 41300 Sales 41300 Cost of Goods sold 20178 Finished Goods 20178 106280 106280

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