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Lean Accounting

Com-Tel Inc. manufactures and assembles two models of smartphonesthe Tiger Model and the Lion Model. The process consists 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		$95,000
Supplies		36,000
Utilities		13,000
Total		$144,000

Com-Tel plans 2,000 hours of production for the Lion Model cell for the year. The materials cost is $61 per unit. Each assembly requires 15 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:

Electronic parts were purchased to produce 6,800 Lion Model assemblies in May.

Conversion costs were applied for 6,450 units of production in May.

6,320 units were completed and transferred to finished goods in May.

6,130 units were shipped to customers at a price of $288 per unit.

If required, round your answers to the nearest cent.

Required:

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1. Determine the budgeted cell conversion cost per hour. $fill in the blank 448f10f7106a032_1 per hour

2. Determine the budgeted cell conversion cost per unit. $fill in the blank 448f10f7106a032_2 per unit

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3. Journalize the summary transactions (a) through (d). If an amount box does not require an entry, leave it blank.

a.	Accounts PayableConversion CostsCost of Goods SoldFinished Goods InventoryRaw and In Process Inventory	- Select -	- Select -
	Accounts PayableConversion CostsCost of Goods SoldFinished Goods InventoryRaw and In Process Inventory	- Select -	- Select -
b.	Accounts PayableConversion CostsCost of Goods SoldFinished Goods InventoryRaw and In Process Inventory	- Select -	- Select -
	Accounts PayableConversion CostsCost of Goods SoldFinished Goods InventoryRaw and In Process Inventory	- Select -	- Select -
3.	Accounts PayableConversion CostsCost of Goods SoldFinished Goods InventoryRaw and In Process Inventory	- Select -	- Select -
	Accounts PayableConversion CostsCost of Goods SoldFinished Goods InventoryRaw and In Process Inventory	- Select -	- Select -
4. Sale	Accounts ReceivableConversion CostsCost of Goods SoldFinished Goods InventorySales	- Select -	- Select -
	Accounts ReceivableConversion CostsCost of Goods SoldFinished Goods InventorySales	- Select -	- Select -
4. Cost	Accounts ReceivableConversion CostsCost of Goods SoldFinished Goods InventorySales	- Select -	- Select -
	Accounts ReceivableConversion CostsCost of Goods SoldFinished Goods InventorySales	- Select -	- Select -

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4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory.

Raw and In Process Inventory	$fill in the blank b0d03af81ff5014_1
Finished Goods Inventory	$fill in the blank b0d03af81ff5014_2

5. Lean accounting is different from traditional accounting because it is more

complexsimplified

and uses

maximumminimal

control. As a result, the number of transactions are

increasedreduced

. In many lean operations, purchased materials are charged to a

"raw and in process inventory" account"materials and indirect labor" account

. Direct labor is

included as a conversion cost of the celldisregarded in the cost allocation process

. Often, nonfinancial performance measures, such as

lead time or quality measures over and under production rates

, are used to monitor performance.

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