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Dashboard Inc. manufactures and assembles automobile instrument panels for both eCar Motors and Greenville Motors. The process consists of a lean product cell for each customer’s instrument assembly. The data that follow concern only the eCar lean cell. For the year, Dashboard Inc. budgeted the following costs for the eCar production cell: Conversion Cost Categories Budget Labor $800,000 Supplies 275,000 Utilities 325,000 Total 1,400,000   Dashboard Inc. plans 2,000 hours of production for the eCar cell for the year. The materials cost is $240 per instrument assembly. Each assembly requires 24 minutes of cell assembly time. There was no April 1 inventory for either Raw and In Process Inventory or Finished Goods Inventory.  The following summary events took place in the eCar cell during April:  Electronic parts and wiring were purchased to produce 450 instrument assemblies in April.  Conversion costs were applied for the production of 400 units in April.  380 units were started, completed, and transferred to finished goods in April.  350 units were shipped to customers at a price of $800 per unit.

Dashboard Inc. manufactures and assembles automobile instrument panels for both eCar Motors and Greenville Motors. The process consists of a lean product cell for each customer’s instrument assembly. The data that follow concern only the eCar lean cell. For the year, Dashboard Inc. budgeted the following costs for the eCar production cell: Conversion Cost Categories Budget Labor $800,000 Supplies 275,000 Utilities 325,000 Total 1,400,000   Dashboard Inc. plans 2,000 hours of production for the eCar cell for the year. The materials cost is $240 per instrument assembly. Each assembly requires 24 minutes of cell assembly time. There was no April 1 inventory for either Raw and In Process Inventory or Finished Goods Inventory.  The following summary events took place in the eCar cell during April:  Electronic parts and wiring were purchased to produce 450 instrument assemblies in April.  Conversion costs were applied for the production of 400 units in April.  380 units were started, completed, and transferred to finished goods in April.  350 units were shipped to customers at a price of $800 per unit.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter13: Lean Manufacturing And Activity Analysis
Section: Chapter Questions
Problem 3PA: Lean accounting Dashboard Inc. manufactures and assembles automobile instrument panels for both eCar...
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  1. Dashboard Inc. manufactures and assembles automobile instrument panels for both eCar Motors and Greenville Motors. The process consists of a lean product cell for each customer’s instrument assembly. The data that follow concern only the eCar lean cell. For the year, Dashboard Inc. budgeted the following costs for the eCar production cell:

Conversion Cost Categories

Budget

Labor

$800,000

Supplies

275,000

Utilities

325,000

Total

1,400,000

 

Dashboard Inc. plans 2,000 hours of production for the eCar cell for the year. The materials cost is $240 per instrument assembly. Each assembly requires 24 minutes of cell assembly time. There was no April 1 inventory for either Raw and In Process Inventory or Finished Goods Inventory. 

The following summary events took place in the eCar cell during April: 

  1. Electronic parts and wiring were purchased to produce 450 instrument assemblies in April. 
  2. Conversion costs were applied for the production of 400 units in April. 
  3. 380 units were started, completed, and transferred to finished goods in April. 
  4. 350 units were shipped to customers at a price of $800 per unit. 

 

  1. Determine the budgeted cell conversion cost per hour. 
  2. Determine the budgeted cell conversion cost per unit. 
  3. Journalize the summary transactions (i) through (iv). 
  4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory. 
  5. How does the accounting in a lean environment differ from traditional accounting?
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