Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $120. The budgeted conversion cost for the year is $192,000 for 2,000 production hours. A unit of Style Omega requires 15 minutes of cell production time. The following transactions took place during June:
1. | Materials were acquired to assemble 800 Style Omega units for June. |
2. | Conversion costs were applied to 800 Style Omega units of production. |
3. | 785 units of Style Omega were completed in June. |
4. | 770 units of Style Omega were sold in June for $174 per unit. |
Required: | |
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 June. Refer to the Chart of Accounts for exact wording of account titles. |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Modern Lighting Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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a. Determine the budgeted cell conversion cost per hour.
$ _______________per hour
b. Determine the budgeted cell conversion cost per unit.
$_______________per unit
c. Journalize the summary transactions (1)-(4) for June 30. Refer to the Chart of Accounts for exact wording of account titles.
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JOURNAL
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a) | Budgeted cell conversion cost per hour | $ 96.00 | ($ 192000 / 2000) |
b) | Budgeted cell conversion cost per unit | $ 24.00 | ($ 96 x 15/60) |
c) | Journal Entries | |||||
Particulars | Debit | Credit | ||||
1) | Raw and In process inventory | $ 96,000.00 | ||||
To Accounts Payable | $ 96,000.00 | |||||
(800 x $ 120) | ||||||
2) | Raw and In process inventory | $ 19,200.00 | ||||
To Conversion Cost | $ 19,200.00 | |||||
(800 x $ 24) | ||||||
3) | Finished Goods Inventory | $ 113,040.00 | ||||
To Raw and In process inventory | $ 113,040.00 | |||||
(785 x $ 144) | ||||||
4) | Accounts Receivable | $ 133,980.00 | ||||
To Sales | $ 133,980.00 | |||||
(770 x $ 174) | ||||||
Cost of Goods sold | $ 110,880.00 | |||||
To Finished Goods Inventory | $ 110,880.00 | |||||
(770 x $ 144) |
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