Homework SourseDashboard Inc manufactures and assembles automobile instrume
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:
1
Conversion Cost Categories
Budget
2
Labor
$800,000.00
3
Supplies
275,000.00
4
Utilities
325,000.00
5
Total
$1,400,000.00
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:
| 1 | Conversion Cost Categories | Budget |
| 2 | Labor | $800,000.00 |
| 3 | Supplies | 275,000.00 |
| 4 | Utilities | 325,000.00 |
| 5 | Total | $1,400,000.00 |
Solution
1. Budgeted cell conversion cost per hour = $1400000/2000 hours = $700 per hour
2. Budgeted cell conversion cost per unit = $1400000/5000 = $280 per unit
Number of units assembled = (2000 hours x 60)/24 minutes = 120000 mins/24 mins = 5000 units
3.
4. Ending balances:
Raw and In process inventory: $108000 + $112000 - $197600 = $22400
Finished Goods Inventory: $197600 - $182000 = $15600
Per Chegg guidelines, 4 sub-parts have been answered.
| Description | Debit | Credit | |
| a. | Raw and In Process Inventory | 108000 | |
| Cash/Accounts Payable (450 x $240) | 108000 | ||
| (Purchase of electronic parts and wiring) | |||
| b. | Raw and In Process Inventory | 112000 | |
| Conversion Costs (400 x $280) | 112000 | ||
| (Conversion costs applied) | |||
| c. | Finished goods inventory [380 x ($240 + $280)] | 197600 | |
| Raw and In process inventory | 197600 | ||
| (Completed and transferred to finished goods) | |||
| d.(1) | Cash/Accounts receivable (350 x $800) | 280000 | |
| Sales | 280000 | ||
| (Sale of goods) | |||
| d.(2) | Cost of goods sold [350 x ($240 + $280)] | 182000 | |
| Finished goods inventory | 182000 | ||
| (Cost of sales of goods) |
