Lean Accounting

Com-tel Inc. manufactures and assembles two models of smartphones-the Tiger Model and the Lion Model. The process consist of a lean cell for each product. The data that follow concern only the lion model lean cell.

For the year, Com-Tel Inc. budgeted these costs for the Lion Model production cell:

Conversion Cost Categories.

Budget

Labor. $144,100

Supplies. 54,600

Utilities 19,700

Total. $218,400

Com-Tel Inc. plans 2,600 hours of production for the lion model cell for the year. The materials cost $71 per unit. Each assembly requires 20 minutes of cell assembly time. There was no May 1 inventory for either Raw and In Process Inventory or finished goods inventory.

The following summary events took place in the Lion model cell during May:

a. Electronic parts were purchased to produce 8,850 Lion model assemblies in May.

b. Conversion cost were applied for 8,400 units of production in May

c. 8,230 units were completed and transferred to finished goods in May.

d. 7,980 units were shipped to customers at a price of $336 per unit.

If required, round your answer to the nearest cent.

Required:

1. Determine the budgeted cellconversion cost per hour

$____ per hour

2. Determine the budgeted cell conversion cost per unit.

$____ per unit

3. Journaliize the summary transactions (a) through (d)

a.______

_________

B._______

_______

C._____

______

D. Sale_______

_____

D. Cost_____

_____

4. Determine the ending balance in Raw and In Process Inventory and finished goods inventory.

Raw and In Process Inventory. $______

Finished Goods Inventory $______

5. Lean accounting is different from traditional accounting because it is more____ and uses____ control. As a result, the number of transactions are ____. In many lean operations, purchase materials ate charged to a _____. Direct labor is frequently ____. Often, non financial performance measures, such as____ are used to monitor performance.