Question: Instant Video Inc uses a just in time strategy to manufacture DVR

Instant Video Inc. uses a just-in-time strategy to manufacture DVR (digital video recorder) players. The company manufactures DVR players through a single product cell. The budgeted conversion cost for the year is $ 550,000 for 2,000 production hours. Each unit requires 12 minutes of cell process time. During May, 800 DVR players are manufactured in the cell. The materials cost per unit is $ 160. The following summary transactions took place during May:
1. Materials are purchased for May production.
2. Conversion costs were applied to production.
3. 800 DVR players are assembled and placed in finished goods.
4. 780 DVR players are sold for $ 320 per unit.
a. Determine the budgeted cell conversion cost per hour.
b. Determine the budgeted cell conversion cost per unit.
c. Journalize the summary transactions (1)–(4) for May.

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  • CreatedJune 27, 2014
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