Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $16. The budgeted conversion cost for the year is $308,000 for 2,200 production hours. A unit of Style Omega requires 18 minutes of cell production time. The following transactions took place during June: Materials were acquired to assemble 620 Style Omega units for June. Conversion costs were applied to 620 Style Omega units of production. 600 units of Style Omega were completed in June. 580 units of Style Omega were sold in June for $100 per unit.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Lean Accounting
Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $16. The budgeted conversion cost for the year is $308,000 for 2,200 production hours. A unit of Style Omega requires 18 minutes of cell production time. The following transactions took place during June:
- Materials were acquired to assemble 620 Style Omega units for June.
- Conversion costs were applied to 620 Style Omega units of production.
- 600 units of Style Omega were completed in June.
- 580 units of Style Omega were sold in June for $100 per unit.
a. Determine the budgeted cell conversion cost per hour.
$fill in the blank 5c7e92fcaf9903d_1 per hour
b. Determine the budgeted cell conversion cost per unit.
$fill in the blank 5c7e92fcaf9903d_2 per unit
c. Journalize the summary transactions (1)–(4) for June. If an amount box does not require an entry, leave it blank.
| 1. |
|
Raw and In Process Inventory | Raw and In Process Inventory |
|
|
Accounts Payable | Accounts Payable | |
| 2. |
|
Raw and In Process Inventory | Raw and In Process Inventory |
|
|
Conversion Costs | Conversion Costs | |
| 3. |
|
Finished Goods Inventory | Finished Goods Inventory |
|
|
Raw and In Process Inventory | Raw and In Process Inventory | |
| 4. Sale |
|
Accounts Receivable | |
|
|
Sales | Sales | |
| 4. Cost |
|
Cost of Goods Sold | Cost of Goods Sold |
|
|
Finished Goods Inventory | Finished Goods Inventory |
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