Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773



Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem

(Appendix 11A) Cycle Time, Velocity, Conversion Cost

The theoretical cycle time for a product is 30 minutes per unit. The budgeted conversion costs for the manufacturing cell are $2,700,000 per year. The total labor minutes available are 600,000. During the year, the cell was able to produce 1.5 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs.


  1. 1. Compute the theoretical conversion cost per unit.
  2. 2. Compute the applied conversion cost per unit (the amount of conversion cost actually assigned to the product).
  3. 3. CONCEPTUAL CONNECTION Discuss how this approach to assigning conversion costs can improve delivery time performance.


To determine

Calculate theoretical conversion cost per unit.


Cycle Time:

Cycle time is the activity performance measure that calculates the duration of time which is required to manufacture one unit of product.

Use the following formula to calculate the theoretical conversion cost per unit:

Theoretical conversion cost per unit=(Theoretical rate1×Theoretical cycle time)

Substitute $4.50 for theoretical rate and 30 minutes for theoretical cycle time in the above formula.

Theoretical conversion cost per unit=$4


To determine

Calculate the applied conversion cost per unit.


To determine

Explain the positive effects of assigning conversion costs to deliver time performance.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the three classifications of receivables?

Financial And Managerial Accounting

Why is productivity important?

Principles of Microeconomics (MindTap Course List)

Describe the three levels of management.

Foundations of Business (MindTap Course List)

What is structured systems design?

Accounting Information Systems

How can you prevent multimedia presentation software from stealing your thunder?

Essentials of Business Communication (MindTap Course List)

REQUIRED RATE OF RETURN Stock R has a beta of 1.5, Stock S has a beta of 0.75, the required return on an averag...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

At what two times should the petty cash fund be replenished?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

How does an employer file an amended Form 940?