Westgate Inc. uses a lean manufacturing strategy to manufacture DVR (digital video recorder) players. The company manufactures DVR players through a single product cell. The budgeted conversion cost for the year is $600,000 for 2,000 production hours. Each unit requires 21 minutes of cell process time. During March, 500 DVR players were manufactured in the cell. The materials cost per unit is $60. The following summary transactions took place during March:
1. Materials were purchased for March production.
2. Conversion costs were applied to production.
3. 500 DVR players were assembled and placed in finished goods.
4. 480 DVR players were sold for $240 per unit.
Required:
a. Determine the budgeted cell conversion cost per hour.
b. Determine the budgeted cell conversion cost per unit.
Answers: 2
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