Submarine Xcel Inc. is examining submarine assembly costs at its Michigan plant. Ithas a initial order for eight of its new nuclear Virgina-class submarine.1. Direct material cost per submarine2. Direct assembly labor time for first submarine$40,0002,000 labor hours3. Learning curve for assembly labor time85% cumulative average time4. Direct assembly labor costs$30 per direct labor hour5. Indirect manufacturing costsEquipment related indirect cost$12 per direct labor hour- Material handling related cost50% of direct material costIn2=0.693147, In3=1.098612, In4=1.386294In0.8=-0.223143, In0.85=-0.162519, In0.9=-0.162519, In0.95=-0.051293(A) How many direct assembly labor hours are required to assemble the first eightsubmarine?(B) What is the total cost of assembling the first eight submarine?ان ی ن ر می ر اه م م ی ی م

Name: Submarine Xcel Inc. is examining submarine assembly costs at its Mich
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Description: Submarine Xcel Inc. is examining submarine assembly costs at its Michigan plant. Ithas a initial order for eight of its new nuclear Virgina-class submarine.1. Direct material cost per submarine2. Direct assembly labor time for first submarine$40,000

Total Cost of product is calculated by adding all the Fixed Costs and Variable costs. It includes…

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1. Direct material cost per submarine $40,000 2. Direct assembly labor time for first submarine 2,000 labor hours 3. Learning curve for assembly labor time 85% cumulative average time 4. Direct assembly labor costs 5. Indirect manufacturing costs $30 per direct labor hour Equipment related indirect cost $12 per direct labor hour Material handling related cost 50% of direct material cost In2=0.693147, In3=1.098612, In4=1.386294 In0.8=-0.223143, In0.85=-0.162519, In0.9=-0.162519, In0.95=-0.051293

1. Direct material cost per submarine $40,000 2. Direct assembly labor time for first submarine 2,000 labor hours 3. Learning curve for assembly labor time 85% cumulative average time 4. Direct assembly labor costs 5. Indirect manufacturing costs $30 per direct labor hour Equipment related indirect cost $12 per direct labor hour Material handling related cost 50% of direct material cost In2=0.693147, In3=1.098612, In4=1.386294 In0.8=-0.223143, In0.85=-0.162519, In0.9=-0.162519, In0.95=-0.051293

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 23E: Bordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for...

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Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce 243,000 laptops per quarter but currently produces 91,125 units. The conversion cost per quarter is 7,290,000. There are 60,750 production hours available within the plant per quarter. In addition to the processing minutes per unit used, the production of the laptops uses 10 minutes of move time, 20 minutes of wait time, and 5 minutes of rework time. (All work is done by cell workers.) Required: 1. Compute the theoretical and actual velocities (per hour) and the theoretical and actual cycle times (minutes per unit produced). 2. Compute the ideal and actual amounts of conversion cost assigned per laptop. 3. Calculate MCE. How does MCE relate to the conversion cost per laptop?
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Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $60. It also expects to manufacture 30.000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: The cost driver for each cost pool and its expected activity is shown: A. What is the per-unit cost for each product under the traditional allocation method? B. What is the per-unit cost for each product under ABC costing?
Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how much will profits increase if 200 more hours of machine time can be obtained?
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Bordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for commercial buildings. For each new design, Bordner faces a 90 percent learning rate. On average, the first unit of a new design takes 600 hours. Direct labor is paid 25 per hour. Required: 1. Set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, and cumulative total time in hours. Show results by row for total production of one unit, two units, four units, eight units, and sixteen units. (Round hour answers to two significant digits.) 2. What is the total labor cost if Bordner makes the following number of units: one, four, sixteen? What is the average cost per system for the following number of systems: one, four, or sixteen? (Round your answers to the nearest dollar.) 3. Using the logarithmic function, set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, cumulative total time in hours, and the time for the last unit. Show results by row for each of units one through eight. (Round answers to two significant digits.)
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