Just-in-Time Accounting Optic Matrix Inc. manufactures and assembles automobile

Question

Just-in-Time Accounting 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: Conversion Cost Categories Budget Labor $78,400 Supplies 29,700 Utilities 10,700 Total $118,800 Optic Matrix Inc. plans 2,200 hours of production for the Yokohama cell for the year. The materials cost is $46 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: Electronic parts and wiring were purchased to produce 7,500 instrument assemblies in November. Conversion costs were applied for the production of 7,150 units in November. 7,010 units were started, completed, and transferred to finished goods in November. 6,800 units were shipped to customers at a price of $216 per unit. If required, round to the nearest cent. Required: Hint(s) 1. Determine the budgeted cell conversion cost per hour. $ per hour 2. Determine the budgeted cell conversion cost per unit. $ per unit Show All Feedback Hint(s) Hide 3. Journalize the summary transactions (a) through (d). a. b. c. d. Sale Cost Show All Feedback 4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory. Raw and In Process Inventory $ Finished Goods Inventory $

Explanation / Answer

Particulars Amount($) Calculation No of units assembled 7333.333333 2200*60/18 Budgeted Hours 2200 Ans 1 Conversion cost per unit Conversion cost / no of units 16.20 118800/7333 Ans 2 Conversion cost per hour Conversion cost / no of hours 54 118800/2200 Conversion cost for 7150 units applied 115830 7150*16.20 7010 units were started, completed and transferredto finished goods 436022 7010*16.20+7010*46 (Direct material + conversion cost) Raw in progress inventory 24808 (7500-7010)*46 + (7150-7010)*16.2 Sales 1468800 Less: Cost of Goods Sold 422960 6800*46+6800*16.2 Profit 1045840 Account title and explanation Debit($) Credit($) Material Cost account Dr. 345000               Cash A/C 345000 Conversion cost A/c 115830              Cash Account 115830 Raw material and in progress inventory 460830              Material 345000              Conversion 115830 Finished goods inventory 436022             Raw material and in progress inventory 436022 Cost of goods sold A/c 436022         Finished goods inventory 436022 Cash 1468800      Sales 1468800 Sales 1468800      COGS 422960       Profit 1045840

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