ptic Matrix Inc. manufactures and assembles automobile instrument panels for bot

Question

ptic 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 $126,700 Supplies 48,000 Utilities 17,300 Total $192,000 Optic Matrix Inc. plans 3,200 hours of production for the Yokohama cell for the year. The materials cost is $51 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 10,900 instrument assemblies in November. Conversion costs were applied for the production of 10,350 units in November. 10,140 units were started, completed, and transferred to finished goods in November. 9,840 units were shipped to customers at a price of $240 per unit. If required, round to the nearest cent. Required: Hint(s) 1. Determine the budgeted cell conversion cost per hour. $ 60 per hour 2. Determine the budgeted cell conversion cost per unit. $ 24 per unit Hide Feedback Correct Check My Work Feedback 1. Budgeted conversion costs ÷ production hours = Conversion rate 2. (Cell process time ÷ 60 minutes) x Conversion rate from Req. (1) = Conversion cost per unit Learning Objective 3. Hint(s) Hide 3. Journalize the summary transactions (a) through (d). a. Raw and In Process Inventory Accounts Payable b. Raw and In Process Inventory Conversion Costs c. Raw and In Process Inventory d. Sale Finished Goods Inventory Accounts Payable Cost Cost of Goods Sold Accounts Payable Hide Feedback Partially Correct Check My Work Feedback 3. (a) Increase Raw and In Process Inventory (debit) and increase Accounts Payable (credit) for per unit amount times 10,900 units. (b) Conversion rate per unit from Req. (2) x 10,350 units = Total Conversion Costs to debit to Raw and In Process Inventory and credit to Conversion Costs. (c) [Materials per unit + Conversion rate per unit from Req. (2)] x 10,140 units = Finished Goods Inventory (debit) and Raw and In Process Inventory (credit). (d) Debit Accounts Receivable and credit Sales for 9,840 units x $240 Debit Cost of Goods sold and credit Finished Goods Inventory for 9,840 units x [Materials per unit + Conversion rate per unit from Req. (2)] Learning Objective 3. 4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory. Raw and In Process Inventory $ Finished Goods Inventory $ 5. JIT accounting is different from traditional accounting because it is more and uses control. Hide Feedback Partially Correct Check My Work Feedback 4. Set up a t-account for Raw and In Process Inventory and Finished Goods Inventory and post your entries from Req. (3) to obtain the balances. 5. Review the differences in characteristics of JIT Accounting and traditional accounting. Learning Objective 3.

Explanation / Answer

Ans 1 Budgeted cell conversion cost per hour 192000/3200 hours 60 per hour Ans 2 Budgeted cell conversion cost per unit Each unit take 24 minutes of cell assembly time 3200 hours*60/24 8000 units are produced 192000/8000 24 per unit a Raw and in process Inventory (10900*51) 555900 Accoumts Payable 555900 (10900 instrument assemblies piurchased @ $51 n account) b Raw and In processInventory (10350*24) 248400 Conversion cost 248400 (Being applied on 10350 units) c Finished Goods Inventory 10140*(51+24) 760500 Raw and in Process Inventory 760500 (Being 10140 units transferred from WIP to Finished Goods) d Accounts Receivable 9840*240 2361600 Sales 2361600 (Being sales made on account) Cost of Good Sold 9840*(51+24) 738000 Finished Goods Inventory 738000 (Being finished goods transferred to COGS for sales of units) Ans 4 Raw and In process Inventory 555900+248400-760500 43800 Finished Goods 760500-738000 22500 Ans 5 Because it is more simple and uses minimal control Raw and in Process Inventory Tras Particular Amt Particular Amt Accounts Payable 555900 Finished Goods 760500 Conversion Cost 248400 End Bal 43800 Finished Goods Inventory Tras Particular Amt Particular Amt Raw and in Process Inventory 760500 Cost of Good Sold 738000 End Balance 22500

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