Question

a. Squirrel Co. operates in a lean manufacturing environment. For June production, conversion cost incurred $25,000...

a. Squirrel Co. operates in a lean manufacturing environment. For June production, conversion cost incurred $25,000 and Squirrel purchased 7,000 units of raw materials at $4.00 per unit on account. The journal entry required to record conversion incurred cost is:

b. Squirrel Co. operates in a lean manufacturing environment. For June production, conversion cost incurred $25,000 and Squirrel purchased 7,000 units of raw materials at $4.00 per unit on account. The journal entry required to record materials purchase transaction is:

c. ABC co. makes wreaths in batch sizes of 10. The cutting & assembly process takes 5 minutes per wreath and the decorating process time is 6 minutes per wreath. It takes 10 minutes to move the wreaths from the cutting & assembly process to the decorating process (this is total move time for all steps). What is the value-added ratio (approximately) for this process?

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Answer #1
Work in Process - Inventory $ 25,000
     Manufacturing Labor $ 25,000
Work in Process - Inventory $ 28,000
     Accounts Payable (7000*4) $ 28,000
Value added leadtime (5+6) 11
Move time 10
Within batch wait time (11*(10-1)) 99
Total lead time 120
Value added ratio (11/120) 9.17%
Within batch wait time = ( total time to perform operations) X ( batch size - 1)
Value added ratio = Value added lead time / Total lead time
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