CMA - Seminar 7 workbook

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School

University of Technology Sydney *

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Course

21061

Subject

Industrial Engineering

Date

Oct 30, 2023

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xlsx

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Uploaded by alfira0119

Question 1 Outline the sequence of activities in the production process. Weaving Setting up cutting machine Cutting Dyeing and drying Stitching Inspecting Packaging Question 2 What are the key differences in the production process for each product? (i.e. between White T-shirts, Black T-shirts, Denim Jeans)

Question 3a a.Calculate the total dollar value of the cost pool for each activity Exhibit 3: Overhead Cost Pools OH Cost Amount Indirect labour $41,600 Indirect material $29,700 Maintenance $45,000 Machine depreciation $53,450 Utilities $59,000 Total $228,750 Share of overheads Weaving Setting up cutting machine Cutting Dyeing and drying Stitching Inspecting Packaging Total (100%) Indirect labour 12.5% 40.0% 12.5% 5.0% 5.0% 12.5% 12.5% 100.0% Indirect material 3.3% 10.0% 10.0% 50.0% 20.0% 3.3% 3.3% 100.0% Maintenance 35.0% 0.0% 30.0% 15.0% 20.0% 0.0% 0.0% 100.0% Machine depreciation 30.0% 0.0% 20.0% 20.0% 30.0% 0.0% 0.0% 100.0% Utilities 14.3% 14.3% 14.3% 14.3% 14.3% 14.3% 14.3% 100.0% Allocation of costs Weaving Setting up cutting machine Cutting Dyeing and drying Stitching Inspecting Packaging Total (100%) Indirect labour $5,200 $16,640 $5,200 $2,080 $2,080 $5,200 $5,200 $41,600 Indirect material $990 $2,970 $2,970 $14,850 $5,940 $990 $990 $29,700 Maintenance $15,750 $0 $13,500 $6,750 $9,000 $0 $0 $45,000 Machine depreciation $16,035 $0 $10,690 $10,690 $16,035 $0 $0 $53,450 Utilities $8,429 $8,429 $8,429 $8,429 $8,429 $8,429 $8,429 $59,000 Activity Total $46,404 $28,039 $40,789 $42,799 $41,484 $14,619 $14,619 $228,750

Question 3b Identify the most appropriate activity driver for each production activity Activity Cost driver Weaving Number of weaving hours Setting up cutting machine number of setups Cutting number of cutting hours Dyeing and drying Number of drying/dyeing hours Stitching Number of stitching hours Inspecting number of inspection Packaging No. of boxes Question 3c Calculate overhead allocation rates for each activity. White T-shirt Black T-shirt Denim Jeans Total Units produced 10,000 10,000 7,500 27,500 Batch size (number of units) 200 200 150 Weaving machine hours/unit 0.00 0.00 0.40 Cutting hours/unit 0.20 0.20 0.40 Dyeing hours/per batch 0.00 30.00 150.00 Stitching labour hours/unit 0.30 0.30 1.50 No. of units in a box 25 25 20 Total weaving hours 0 0 3,000 3,000 Total number of batches 50 50 50 150 Total number of setups 25 25 50 100 Total number of dry/dye hrs 0 1,500 7,500 9,000 Total cutting hours 2,000 2,000 3,000 7,000 Total number of stitching hours 3,000 3,000 11,250 17,250 total stitching hours Total number of inspections 50 50 50 150 1 inspection per batch Total number of boxes 400 400 375 1,175 units produced divided by units per box Activity Budgeted Cost Cost driver Total Driver Use Rate Weaving $46,404 Number of weaving hours 3,000 $15.4679 per weaving hour Setting up cutting machine $28,039 number of setups 100 $280.3857 per setup Cutting $40,789 number of cutting hours 7,000 $5.8269 per cutting hour Dyeing and drying $42,799 Number of drying/dyeing hours 9,000 $4.7554 per dying hour Stitching $41,484 Number of stitching hours 17,250 $2.4048 per stitching hour Inspecting $14,619 number of inspection 150 $97.4571 per inspection Packaging $14,619 No. of boxes 1,175 $12.4413 per box

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