Grand Prix Displays Inc. manufactures and assembles automobile instrument panels
ID: 2490169 • 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
$596,000.00
3
Supplies
42,000.00
4
Utilities
29,000.00
5
Total
$667,000.00
Grand Prix Displays Inc. plans 2,300 hours of production for the Yokohama cell for the year. The materials cost is $200 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.
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JOURNAL
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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 (SIMPLIFIED/COMPLEX) and uses (MINIMAL/MAXIMUM) control.
1
Conversion Cost Categories
Budget
2
Labor
$596,000.00
3
Supplies
42,000.00
4
Utilities
29,000.00
5
Total
$667,000.00
Explanation / Answer
1. Determine the budgeted cell conversion cost per hour.
$290 per hour (667000 / 2300) = $290 / hour
2. Determine the budgeted cell conversion cost per unit. Round your answer to the nearest whole dollar.
$72.5 per unit (667000 / (2300 x 4) ) = $72.5 / unit
3. Journalize the summary transactions for November. Refer to the Chart of Accounts for exact wording of account titles.
4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory.
Date Description Post. Ref. Debit Credit 1 04/11 (8800 x 200) = $176000 Direct Material Accounts Payable 2 04/11 (8600 x 200) = $172000 In Process Inventory Material 3 06/11 (8600 x 72.5) = $623500 In Process Inventory Conversion cost 4 24/11 (8500 x 272.5) = $2316250 Finished Inventory In Process Inventory 5 29/11 (8450 x 430) = $3633500 Accounts Payable SaleRelated Questions
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