Morrison, Inc., has a JIT system in place. Each manufacturing cell is dedicated to the production of a single product or major subassembly. One cell, dedicated to the production of small four wheelers, has four operations: machining, finishing, assembly, and qualifying (testing). The machining process is automated, using computers. In this process, the model’s frame and engine are constructed. In finishing, the frame is sandblasted, buffed, and painted. In assembly, the frame and engine are assembled. Finally, each model is tested to ensure operational capability. For the coming year, the four-wheeler cell has the following budgeted costs and cell time (both at theoretical capacity):

Required:LO1

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Budgeted conversion costs Budgeted materials Cell time Theoretical output $15,500,000 $18,600,000 24,800 hours 18,600 models During the year, the following actual results were obtained: Actual conversion costs Actual materials Actual cell time Actual output $15,500,000 $16,120,000 24,800 hours 15,500 models