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.

For the year, Optic Matrix Inc. budgeted the following costs for the Yokohama production cell:

Optic Matrix Inc. plans 2,000 hours of production for the Yokohama cell for the year. The materials cost is $51 per instrument assembly. Each assembly requires 20 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:

Electronic parts and wiring were purchased to produce 6,800 instrument assemblies in November.

Conversion costs were applied for the production of 6,450 units in November.

6,320 units were started, completed, and transferred to finished goods in November.

6,130 units were shipped to customers at a price of $240 per unit.

If required, round to the nearest cent.

Required:

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

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

3. Journalize the summary transactions (a) through (d).

a.

  

  

  

  

b.

  

  

  

  

c.

  

  

  

  

d. Sale

  

  

  

  

Cost

  

  

  

  

4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory.

5. JIT accounting is different from traditional accounting because it is more SelectcomplexsimplifiedCorrect 3 of Item 3 and uses SelectmaximumminimalCorrect 4 of Item 3 control.

Conversion Cost Categories Budget Labor $79,200 Supplies 30,000 Utilities 10,800    Total $120,000

Explanation / Answer

1.Budgeted Cell Conversion Cost per hour = 120000 / 2000 = $ 60 per hour

2. Budgeted Cell Conversion Cost Per Unit = 120000 / 6000 = $ 20per unit

3. Sale Entry :- Accounts Receivable Dr. 1471200 ( 240*6130)

   To Sales 1471200

Cost Entry :- Cost of goods sold Dr. 435,230 ( 6130 * (51+20))

To Finished goods 435,230

4. Ending balanace in :-

Raw material and progress inventory = 350 * 51 = $ 17,850

Finished goods inventory = 190 ( 51+20) = $ 13,490

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