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 For the year, Grand Prix Displays Inc. budgeted the following costs for the Yokohama production cell: Conversion Cost Categories Budget 2 Labor 3 Supplies 4 Utilities 5 Total 464,000.00 44,000.00 32,000.00 $540,000.00 Grand Prix Displays Inc. plans 2,000 hours of production for the Yokohama cell for the year. The materials cost is $140 per instrument assembly. Each assembly requires 15 minutes of cell assembly time. There was no November 1 inventory for either

Explanation / Answer

Q-1

3. Journal entry

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1. Determine the budgeted cell conversion cost per hour. Budgeted cell conversion cost per hour = 540000/2000 Budgeted cell conversion cost per hour = $ 270 per hour 2. Determine the budgeted cell conversion cost per unit. Budgeted Unit = 2000/15 * 60 = 8000 Unit Budgeted cell conversion cost per unit = 540000/8000 Budgeted cell conversion cost per unit= $67.5 per unit

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