Right Now Video Inc. uses a lean manufacturing 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 $420,000 for 2,000 production hours. Each unit requires 9 minutes of cell process time. During July, 1,100 DVR players are manufactured in the cell. The materials cost per unit is $135. The following summary transactions took place during July:
1. Materials are purchased for July production.
2. Conversion costs were applied to production.
3. 1,100 DVR players are assembled and placed in finished goods.
4. 1,060 DVR players are sold for $335 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 July.