Westgate Inc. uses a lean manufacturing strategy to manufacture DVR (digital video recorder) players. The company manufactures DVR players through a single product cell. The budgeted conversion cost for the year is $897,000 for 2,300 production hours. Each unit requires 10 minutes of cell process time. During March, 880 DVR players were manufactured in the cell. The materials cost per unit is $63. The following summary transactions took place during March: 1. Materials were purchased for March production. 2. Conversion costs were applied to production. 3. 880 DVR players were assembled and placed in finished goods. 4. 840 DVR players were sold for $227 per unit. a. Determine the budgeted cell conversion cost per hour. If required, round to the nearest dollar. per hour b. Determine the budgeted cell conversion cost per unit. If required, round to the nearest dollar. per unit c. Journalize the summary transactions (1)-(4) for March. If an amount box does not require an entry, leave it blank. 1. 2. 3. 4. Sale 4. Cost 1I II II I 1I II II I
Westgate Inc. uses a lean manufacturing strategy to manufacture DVR (digital video recorder) players. The company manufactures DVR players through a single product cell. The budgeted conversion cost for the year is $897,000 for 2,300 production hours. Each unit requires 10 minutes of cell process time. During March, 880 DVR players were manufactured in the cell. The materials cost per unit is $63. The following summary transactions took place during March: 1. Materials were purchased for March production. 2. Conversion costs were applied to production. 3. 880 DVR players were assembled and placed in finished goods. 4. 840 DVR players were sold for $227 per unit. a. Determine the budgeted cell conversion cost per hour. If required, round to the nearest dollar. per hour b. Determine the budgeted cell conversion cost per unit. If required, round to the nearest dollar. per unit c. Journalize the summary transactions (1)-(4) for March. If an amount box does not require an entry, leave it blank. 1. 2. 3. 4. Sale 4. Cost 1I II II I 1I II II I
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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