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for the aluminum wheel value stream for the week were 15,000. The following costs were incurred: Salaries/ Materials Wages Machining $18,200 188,400 24,300 $350,000 35,000 $37,000 150,000 42,000 42,000 DO 645,000 11,000 10,000 14,400 $1,145,000 $343,300 $79,000 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total Required: Model A Model B Other Unit Cost $19,000 148 ✓ 81 ✓ 12,000 $31,000 Total Cost $18,200 188,400 24,300 441,000 246,000 645,000 11,000 10,000 1. Assume initially that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost. Round your answer to the nearest dollar amount. 96✔ per unit 14,400 2. Model A is responsible for 40 percent of the materials cost. Using the average conversion cost approach, calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount. $1,598,300

for the aluminum wheel value stream for the week were 15,000. The following costs were incurred: Salaries/ Materials Wages Machining $18,200 188,400 24,300 $350,000 35,000 $37,000 150,000 42,000 42,000 DO 645,000 11,000 10,000 14,400 $1,145,000 $343,300 $79,000 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total Required: Model A Model B Other Unit Cost $19,000 148 ✓ 81 ✓ 12,000 $31,000 Total Cost $18,200 188,400 24,300 441,000 246,000 645,000 11,000 10,000 1. Assume initially that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost. Round your answer to the nearest dollar amount. 96✔ per unit 14,400 2. Model A is responsible for 40 percent of the materials cost. Using the average conversion cost approach, calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount. $1,598,300

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter15: Lean Accounting And Productivity Measurement
Section: Chapter Questions
Problem 2CE: During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its aluminum...
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Value-Stream Costing Objective During the week of June 12, Harrison Manufacturing produced and shipped 16,600 units of its aluminum wheels: 3,800 units of Model A and 12,800 units of Model B. The cycle time for Model A is 0.80 hours and that of Model B is 0.55 hours. The total net work hours for the aluminum wheel value stream for the week were 15,000. The following costs were incurred: Salaries/ Materials Wages Machining $18,200 188,400 24,300 $350,000 35,000 $37,000 09 150,000 42,000 42,000 645,000 11,000 10,000 14,400 $1,145,000 $343,300 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total Model A Model B $ $ $79,000 Unit Cost Other 148 ✓ 81 ✓ $19,000 Required: 1. Assume initially that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost. Round your answer to the nearest dollar amount. 96 per unit 12,000 2. Model A is responsible for 40 percent of the materials cost. Using the average conversion cost approach, calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount. $31,000 Total Cost $18,200 188,400 24,300 441,000 246,000 645,000 11,000 10,000 14,400 $1,598,300
Transcribed Image Text:Value-Stream Costing Objective During the week of June 12, Harrison Manufacturing produced and shipped 16,600 units of its aluminum wheels: 3,800 units of Model A and 12,800 units of Model B. The cycle time for Model A is 0.80 hours and that of Model B is 0.55 hours. The total net work hours for the aluminum wheel value stream for the week were 15,000. The following costs were incurred: Salaries/ Materials Wages Machining $18,200 188,400 24,300 $350,000 35,000 $37,000 09 150,000 42,000 42,000 645,000 11,000 10,000 14,400 $1,145,000 $343,300 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total Model A Model B $ $ $79,000 Unit Cost Other 148 ✓ 81 ✓ $19,000 Required: 1. Assume initially that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost. Round your answer to the nearest dollar amount. 96 per unit 12,000 2. Model A is responsible for 40 percent of the materials cost. Using the average conversion cost approach, calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount. $31,000 Total Cost $18,200 188,400 24,300 441,000 246,000 645,000 11,000 10,000 14,400 $1,598,300
3. What if Model and Model B are not homogeneous products? Assume the same materials usage as in Requirement 2. Use DBC to calculate the unit cost for the two products. Round your interim calculations and final answers to the nearest dollar amount. Model A Model B Unit Cost X Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2. Explain why DBC is a good approach for value-stream costing. DBC should be used if the products are not ✓, it is simple and easy homogeneous products. Even when the products are homogeneous ✓to use. DBC is more accurate as it approximates ABC assignments.
Transcribed Image Text:3. What if Model and Model B are not homogeneous products? Assume the same materials usage as in Requirement 2. Use DBC to calculate the unit cost for the two products. Round your interim calculations and final answers to the nearest dollar amount. Model A Model B Unit Cost X Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2. Explain why DBC is a good approach for value-stream costing. DBC should be used if the products are not ✓, it is simple and easy homogeneous products. Even when the products are homogeneous ✓to use. DBC is more accurate as it approximates ABC assignments.
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