Just-in-Time Accounting Grand Prix Displays Inc. manufactures and assembles auto

Question

Just-in-Time Accounting Grand Prix Displays 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, Grand Prix Displays Inc. budgeted the following costs for the Yokohama production cell: Conversion Cost Categories Labor Supplies Utilities Budget $685,000 47,000 Total $756,000 Grand Prix Displays Inc. plans 2,400 hours of production for the Yokohama cell for the year. The materials cost is $100 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: a. Electronic parts and wiring were purchased to produce 7,300 instrument assemblies in November. b. Conversion costs were applied for the production of 7,200 units in November. c. 7,150 units were started, completed, and transferred to finished goods in November. d. 7,000 units were shipped to customers at a price of $400 per unit. Required Hint 1. Determine the budgeted cell conversion cost per hour 305 per hour 2. Determine the budgeted cell conversion cost per unit. 305 per unit

Explanation / Answer

budgeted hours 2400 Hours per unit required 20 minutes No. of Budgeted units produced 7200 2400/20*60 Total conversion Cost $756000 Ans 1 Budgeted cell conversion rate per hour 756000/2400 315 Ans 2 Budgeted cell conversion rate per unit Budgeted conversion cost/No.of units 756000/7200 105 No. Accounst Title Dr Cr a Raw and In process Inventory $730000 Accounts Payable (7300*100) $730000 b Raw and In process Inventory 756000 Conversion Cost (7200*105) 756000 c Finished Goods inventory 1465750 Raw and In process Inventory (7150*(100+105) 1465750 d Accounts Receivable 2800000 Sales (7000*400) 2800000 Cost of Good Sold 1435000 Finished Goods inventory (7000*205) 1435000 Finished Goods Inventory (1465750-1435000) 30750 Raw and In process Inventory (730000+756000-1465750) 20250 Ans 5 Simple and uses inventory control Note: In check my feedback it is given that apply conversion cost to 7300 units but in question it is given 7200 units so I have taken 7200 units, if I take 7300 units than Raw and In process Inventory will change which is as follows b Raw and In process Inventory 766500 Conversion Cost (7300*105) 766500 Raw and In process Inventory (730000+766500-1465750) 30750

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