Lean Accounting

Com$-$Tel Inc. manufactures and assembles two models of smartphones$$the Tiger Model and the Lion Model. The process consists of a lean cell for each product. The data that follow concern only the Lion Model lean cell.

For the year, Com$-$Tel Inc. budgeted these costs for the Lion Model production cell:

Conversion Cost Categories Budget

Labor $$123,600$

Supplies $46,800$

Utilities $16,800$

Total $$187,200$

Com$-$Tel plans $2,600$ hours of production for the Lion Model cell for the year. The materials cost is $$61$ per unit. Each assembly requires $15$ minutes of cell assembly time. There was no May $1$ inventory for either Raw and In Process Inventory or Finished Goods Inventory.

The following summary events took place in the Lion Model cell during May:

Electronic parts were purchased to produce $8,850$ Lion Model assemblies in May.

Conversion costs were applied for $8,400$ units of production in May.

During May, $8,230$ units were completed and transferred to finished goods.

Of the $8,230$ units completed, $7,980$ units were shipped to customers at a price of $$288$ per unit.

If required, round your answers to the nearest cent.

Required:

Question Content Area

$1.$ Determine the budgeted cell conversion cost per hour.

fill in the blank $1$ of $1$$

per hour

$2.$ Determine the budgeted cell conversion cost per unit.

fill in the blank $1$ of $1$$

per unit

Feedback Area

Feedback

$1.$ Cell Conversion Cost Rate $=$ Budgeted Conversion Cost $-$: Planned Hours of Production

$2.$ Conversion Cost for Smartphone $=$ Manufacturing Time $\backslash$times Cell Conversion Cost Rate

Question Content Area

$3.$ Journalize the summary transactions $($a$)$ through $($d$).$ If an amount box does not require an entry, leave it blank.

TransactionAccountDebitCredit

a$.$

b$.$

$3.$

$4.$ Sale

$4.$ Cost

Feedback Area

Feedback

$3.$ In lean manufacturing, there are fewer transactions to record, thus simplifying the accounting system. Some accounts are combined. For example, all in$-$process work is combined with raw materials to form a new account, Raw and In Process $($RIP$)$ Inventory and direct labor is also combined with other costs to form a new account titled Conversion Costs. Indirect labor is directly assigned to product cells; thus, less factory overhead is allocated to products. The cell conversion rate is similar to a predetermined factory overhead rate, except that it includes all conversion costs in the numerator.

Question Content Area

$4.$ Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory.

Raw and In Process Inventory: fill in the blank $1$ of $2$$

Finished Goods Inventory: fill in the blank $2$ of $2$$