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Lean Accounting Dashboard Inc. manufactures and assembles automobile instrument panels for both eCar Motors and Greenville Motors. The process consists of a lean product cell for each customer's instrument assembly. The data that follow concern only the eCar lean cell. For the year, Dashboard Inc. budgeted the following costs for the eCar production cell: Conversion Cost Categories Budget Labor $800,000 Supplies 275,000 I Utilities 325,000 Total $1,400,000 Dashboard Inc. plans 2,000 hours of production for the eCar cell for the year. The materials cost is $240 per instrument assembly. Each assembly requires 24 minutes of cell assembly time. There was no April 1 inventory for either Raw and In Process Inventory or Finished Goods Inventory. The following summary events took place in the eCar cell during April: a. Electronic parts and wiring were purchased to produce 450 instrument assemblies in April. b. Conversion costs were applied for the production of 400 units in April. c. 380 units were started, completed, and transferred to finished goods in April. d. 350 units were shipped to customers at a price of $800 per unit. Required: Previous Check My Work Next >
Required: 1. Determine the budgeted cell conversion cost per hour. per hour 2. Determine the budgeted cell conversion cost per unit. per unit Feedback Check My Work 1. Cell Conversion Cost Rate Budgeted Conversion Cost + Planned Hours of Production 2. Conversion Cost Per Unit Manufacturing Time x Cell Conversion Cost Rate 3. Journalize the summary transactions (a) through (d). If an amount box does not require an entry, leave it blank. Raw and In Process Inventory a. Accounts Payable b. Raw and In Process Inventory Conversion Costs Finished Goods Inventory Previous Next Email Instructor Save and Exit Submit Assignment for Grading C. Check My Work All work saved.
Finished Goods Inventory Raw and In Process Inventory ✓ C. d. Sale Accounts Receivable Sales d. Cost Cost of Goods Sold Feedback Finished Goods Inventory Check My Work 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. 4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory. Raw and In Process Inventory: Finished Goods Inventory: Previous Next Check My Work and Evit Submit Assignment for Grading
4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory. Raw and In Process Inventory: Finished Goods Inventory: 5. Lean accounting is different from traditional accounting because it is more simplified control. As a result, the number of transactions are reduced and uses minimal V. In many lean operations, purchased materials are charged to a "raw and in process inventory" account ✓. Direct labor is included as a conversion cost of the cell ✓, are used to monitor performance. Often, nonfinancial performance measures, such as lead time or quality measures Feedback Check My Work 4. Set up a T-account for Raw and In Process Inventory and Finished Goods Inventory and post your entries from Req. (3) to obtain the balances.. 5. Review the differences in characteristics of just-in-time (JIT) Accounting and traditional accounting. Feedback Previous Next Check My Work Partially correct Check My Work