Just-in-Time Journal Entries Martin Lighting Inc. manufactures lighting fixtures

Question

Just-in-Time Journal Entries

Martin Lighting Inc. manufactures lighting fixtures, using just-in-time manufacturing methods. Style BB-01 has a materials cost per unit of $22. The budgeted conversion cost for the year is $189,000 for 3,000 production hours. A unit of Style BB-01 requires 12 minutes of cell production time.

The following transactions took place during October:

Materials were acquired to assemble 610 Style BB-01 units for October.

Conversion costs were applied to 610 Style BB-01 units of production.

570 units of Style BB-01 were completed in October.

530 units of Style BB-01 were sold in October for $70 per unit.

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 the nearest cent.
$ per unit

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

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

Explanation / Answer

A Budgeted cell Conversion cost per hour Total Budgeted Cost    189,000 Budgeted Hour        3,000 Conversion Cost per Hour          63.0 B Conversion Cost per hour          63.0 Budgted Production time per Unit in Minutes 12 Cost per Unit (63/60*12)        12.60 Debit Credit C Material A/C dr.      13,420 To Cash A/C     13,420 Work in progress A/C dr      21,106 To material A/C     13,420 To Conversion Cost (12.60*610)       7,686 Finished Goods A/C dr. (21106/610*570)      19,722 To Work in progress A/C     19,722 Cost Of Goods Sold A/C (19722/570*530)      18,338 To Finished Cost A/C     18,338 Account receivable A/C dr.      37,100 To Sale A/C     37,100

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