Optic Matrix Inc. manufactures and assembles automobile instrument panels for bo

Question

Optic Matrix Inc. manufactures and assembles automobile instrument panels for both Yokohama Motors and Detroit Motors. The process consists of a just-in-time product cell for each customer's instrument assembly. The data that follow concern only the Yokohama just-in-time cell.

Optic Matrix Inc. plans 3,200 hours of production for the Yokohama cell for the year. The materials cost is $125 per instrument assembly. Each assembly requires 24 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:

Instructions:

1. Determine the budgeted cell conversion cost per hour.
$ per hour

2. Determine the budgeted cell conversion cost per unit.
$ per unit

Explanation / Answer

1. Determine the budgeted cell conversion cost per hour.

Budgeted cell conversion cost per hour = 736000/3200

Budgeted cell conversion cost per hour = $ 230 per hour

2. Determine the budgeted cell conversion cost per unit.

Budgeted Unit = 3200/24 * 60 = 8000 Unit

Budgeted cell conversion cost per unit = 736000/8000

Budgeted cell conversion cost per unit. = $ 92 per unit

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