Grand Prix Displays Inc. manufactures and assembles automobile instrument panels
ID: 2477126 • Letter: G
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:
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
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.
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.
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
Explanation / Answer
Solution 1:
budgeted cell conversion cost per hour = Budgeted conversion cost / Budgeted labor hours = $728,000 / 2800
= $260 per hour
Solution 2:
budgeted cell conversion cost per unit = Conversion cost per hour * conversion time per unit
= $260 * 15/60 = $65 per unit
Solution 3:
Solution 4:
Ending balance of Raw and in process inventory = $1,092,000 + $533,000 - $1,579,500 = $45,500
Ending balance of finished goods inventory = $1,579,500 - $1,563,900 = $15,600
Note: I have answered first 4 parts of the question as per chegg policy. Kindly post separate question for answer of remaining parts.
Journal Entries - Com Tel Inc. Date Particulars Debit Credit 4-Nov Raw and In Process Inventory Dr $1,092,000.00 To Accounts Payable (8,400*$130) $1,092,000.00 6-Nov Raw and In Process Inventory Dr $533,000.00 To Conversion cost (8200*$65) $533,000.00 24-Nov Finished goods inventory Dr (8100 * $195) $1,579,500.00 To Raw and In Process Inventory $1,579,500.00 29-Nov Accounts receivables Dr (8020*$410) $3,288,200.00 To Sales $3,288,200.00 29-Nov Cost of goods sold Dr (8020*$195) $1,563,900.00 To Fininshed goods invenotry $1,563,900.00Related Questions
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