Cycle Time, Velocity, Product Costing Mulhall, 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 mopeds, 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 moped cell has the following budgeted costs and cell time (both at theoretical capacity): Budgeted conversion costs $5,541,120   Budgeted materials $18,668,000   Cell time 35,520   Theoretical output 17,760 models During the year, the following actual results were obtained: Actual conversion costs $5,541,120   Actual materials $4,009,000   Actual cell time 35,520 hours Actual output 13,320 models Required: 4. Compute the budgeted conversion cost per minute. If required, round your answer to the nearest cent. $fill in the blank  per minute Using this rate, compute the conversion cost per model if theoretical output is achieved. $fill in the blank  per model Using this measure, compute the conversion cost per model for actual output. $fill in the blank  per model Does this product costing approach provide an incentive for the cell manager to reduce cycle time?

Cycle Time, Velocity, Product Costing

Mulhall, 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 mopeds, 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 moped cell has the following budgeted costs and cell time (both at theoretical capacity):

During the year, the following actual results were obtained:

Required:

4. Compute the budgeted conversion cost per minute. If required, round your answer to the nearest cent.
$fill in the blank  per minute

Using this rate, compute the conversion cost per model if theoretical output is achieved.
$fill in the blank  per model

Using this measure, compute the conversion cost per model for actual output.
$fill in the blank  per model

Does this product costing approach provide an incentive for the cell manager to reduce cycle time?