Foley Electronics Corporation manufactures and assembles electronic motor drives
ID: 2343692 • Letter: F
Question
Foley Electronics Corporation manufactures and assembles electronic motor drives for video cameras The company assembles the motor drives for several accounts. The process consists of a just-in-time cell for each customer. The following information relates only to one customer's just-in-time cell for the coming year. Projected labor and overhead, $4,800,000; materials costs, $25 per unit. Planned production included 2,400 hours to produce 19,200 motor drives. Actual production for August was 1,300 units, and motor drives shipped amounted to 1,260 units.From the foregoing information, determine the amount of the conversion costs charged to Raw and In Process Inventory during August.
Do not just give an answer. Please, explain. Thank you
Explanation / Answer
budgeted cell conversion cost per hour =$4,800,000/2,400 =$2000/hr 19,200 motor drives take 2,400 hours 1 motor drives takes=2,400 /19,200 =0.1250 hrs Cost of 0.1250 hrs = 0.1250 hrs*2000$/hr= $250 manufacturing cost per unit = Labor cost + material cost =$250 + $25= $275 per unit Ans $275