Question

Sifton Electronics Corporation manufactures and assembles electronic motor drives for video cameras. The company assembles the motor drives for several accounts. The process consists of a lean cell for each customer. The following information relates only to one customer's lean cell for the coming year. Projected labor and overhead, $7,370,000; materials costs, $28 per unit. Planned production included 4,000 hours to produce 27,500 motor drives. Actual production for August was 1,600 units, and motor drives shipped amounted to 1,380 units. From the foregoing information, determine the production costs transferred to Finished Goods during August.

a. $428,800

b. $473,600

c. $369,840

d. $408,480

Answer 1

	Costs:	Total
	Direct Material	28.00
A	Projected Labor and OH	7370000
B	Planned Hours	4000
A/B	Per Hour OH	1,842.50
A	Planned Motors	27500
B	Planned Hours	4000
A/B	Motors Per Hour	6.875
A	Actual Production	1600
B	Motors Per Hour	6.875
A/B	Total Standard Hours	232.73
	Costs:	PU	Total
	Direct Material	28.00	44800	(1600*28)
	Projected Labor and OH		428800	(Standard Hours*Rate Per OH)	(232.73*1842.50)
	Total Costs		473600
	Answer is B