Needed

1. Calculate the predetermined conversion cost rates for the Radiator cell and the Water Pump cell. Use cell referencing to calculate your rates.
2. Prepare all the journal entries using the backflush accounting. Assume two trigger points (1) the purchase of raw materials and (2) the completion of goods as the second trigger point.

Part 2 ABC company has made some major accounting changes. The controller has decided to combine direct labor cost with overhead. The company has created two manufacturing cells, each capable of producing radiator cell and water pump cell. The output of both cells is sold to a division within the corporation. Product-level overhead costs outside the cells are assigned to each cell using appropriate drivers. Facility-level costs are allocated to each cell on basis of square footage. The budgeted direct labor and overhead costs are as follows: Direct labor costs Direct overhead Product sustaining Facility level Total conversion cost Radiator Cell Water Pump Cell $ 190,000 $ 110,000 720,000 360,000 269,990 107,800 180,000 90,000 667.800 The predetermined conversion cost rate is based on available production hours in each cell. Hours availabl Units produced Hours/unit Radiator cell 40,500 81,000 Water pump cell 22,500 90,000 0.25 0.5 Conversion costs are applied to units produced by multiplying the conversion rate by the actual time required to produce the units. All units produced are sold. Any conversion cost variance is closed to cost of Goods Sold. Other actual results for the year are as follows: Direct materials purchased and issued Direct labor costs Overhead $1,500,000 300,000 1,890,000