Grand Prix Displays Inc. manufactures and assembles automobile instrument panels

Question

Grand Prix Displays Inc. manufactures and assembles automobile instrument panels for both Yokohama Motors and Detroit Motors. The process consists of a lean product cell for each customer’s instrument assembly. The data that follow concern only the Yokohama lean cell. For the year, Grand Prix Displays Inc. budgeted the following costs for the Yokohama production cell: 1 Conversion Cost Categories Budget 2 Labor $657,000.00 3 Supplies 41,000.00 4 Utilities 30,000.00 5 Total $728,000.00 Grand Prix Displays Inc. plans 2,800 hours of production for the Yokohama cell for the year. The materials cost is $130 per instrument assembly. Each assembly requires 15 minutes of cell assembly time. There was no November 1 inventory for either Raw and In Process Inventory or Finished Goods Inventory. The following summary events took place in the Yokohama cell during November: Nov. 4 Electronic parts and wiring were purchased to produce 8,400 instrument assemblies in November. 6 Conversion costs were applied for the production of 8,200 units in November. 24 8,100 units were started, completed, and transferred to finished goods in November. 29 8,020 units were shipped to customers at a price of $410 per unit. 1. Determine the budgeted cell conversion cost per hour. per hour 2. Determine the budgeted cell conversion cost per unit. Round your answer to the nearest whole dollar. per unit 3. Journalize the summary transactions for November. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory. Raw and In Process Inventory Finished Goods Inventory 5. How does the accounting in a lean environment differ from traditional accounting? Lean accounting is different from traditional accounting because it is more _______ and uses __________ control.

Explanation / Answer

1. Budgeted Cell Conversion cost per Labour hour = total conversion cost/Total labour hour

= 728000/2800 = $ 260 per labour hour

2. Budgetwd cell conversion cost per unit = 728000/8200 unit = $88.78 per unit

3.Journal Entry:

Debtor A/c Dr (8020*410) 3288200

Sales A/c Cr 3288200

(being Units sold to customer)

Since 8100 units are started for production but only finished units are 8020 hence (8100 - 8020 = 80 Units are loss during the cycle of producton

Endinf balance of Raw material & Process Inventory finished goods :

total budgeted units = 8400

Production start - 8100

Stock of units as raw material = 300

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.