Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $140. The budgeted conversion cost for the year is $180,600 for 2,150 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 850 Style Omega units for June. 2. Conversion costs were applied to 850 Style Omega units of production. 3. 835 units of Style Omega were completed in June. 4. 820 units of Style Omega were sold in June for $191 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 ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 150 Raw and In Process Inventory 151 Finished Goods Inventory 180 Land 190 Equipment 191 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customers Refunds Payable 221 Notes Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary REVENUE 410 Sales EXPENSES 510 Cost of Goods Sold 511 Conversion Costs 521 Advertising Expe
Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $140. The budgeted conversion cost for the year is $180,600 for 2,150 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 850 Style Omega units for June. 2. Conversion costs were applied to 850 Style Omega units of production. 3. 835 units of Style Omega were completed in June. 4. 820 units of Style Omega were sold in June for $191 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 ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 150 Raw and In Process Inventory 151 Finished Goods Inventory 180 Land 190 Equipment 191 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customers Refunds Payable 221 Notes Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary REVENUE 410 Sales EXPENSES 510 Cost of Goods Sold 511 Conversion Costs 521 Advertising Expe
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $140. The budgeted conversion cost for the year is $180,600 for 2,150 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 850 Style Omega units for June. |
| 2. | Conversion costs were applied to 850 Style Omega units of production. |
| 3. | 835 units of Style Omega were completed in June. |
| 4. | 820 units of Style Omega were sold in June for $191 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 30. Refer to the Chart of Accounts for exact wording of account titles.
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