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Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view data) Requirement Calculate the total variable costs of producing 2, 4, and 8 units. Begin by calculating the total cumulative time in labor-hours. (Round the cumulative average time per unit to the nearest whole number.) Number of Cumulative average time Cumulative total time: units per unit: Labor-hours Labor-hours 2 4 8 2,635 2,240 1,904 Now calculate the total variable costs of producing 2, 4, and 8 units. Variable costs of producing 4 Units Direct materials Direct manufacturing labor Variable manufacturing overhead Total variable costs 5,270 8,960 15,232 2 Units 8 Units ***** Data Table Direct material cost Direct manufacturing labor time for first unit Learning curve for manufacturing labor time per radar system Direct manufacturing labor cost Variable manufacturing overhead cost aUsing the formula for an 85% learning curve, b: In 0.85 In 2 Print $ $ $ -0.162519 0.693147 = Done 88,000 per unit of RS-32 3,100 direct manufacturing labor-hours 85% cumulative average time 25 per direct manufacturing labor-hour 15 per direct manufacturing labor-hour -0.234465

Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view data) Requirement Calculate the total variable costs of producing 2, 4, and 8 units. Begin by calculating the total cumulative time in labor-hours. (Round the cumulative average time per unit to the nearest whole number.) Number of Cumulative average time Cumulative total time: units per unit: Labor-hours Labor-hours 2 4 8 2,635 2,240 1,904 Now calculate the total variable costs of producing 2, 4, and 8 units. Variable costs of producing 4 Units Direct materials Direct manufacturing labor Variable manufacturing overhead Total variable costs 5,270 8,960 15,232 2 Units 8 Units ***** Data Table Direct material cost Direct manufacturing labor time for first unit Learning curve for manufacturing labor time per radar system Direct manufacturing labor cost Variable manufacturing overhead cost aUsing the formula for an 85% learning curve, b: In 0.85 In 2 Print $ $ $ -0.162519 0.693147 = Done 88,000 per unit of RS-32 3,100 direct manufacturing labor-hours 85% cumulative average time 25 per direct manufacturing labor-hour 15 per direct manufacturing labor-hour -0.234465

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
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view data) Requirement Calculate the total variable costs of producing 2, 4, and 8 units. Begin by calculating the total cumulative time in labor-hours. (Round the cumulative average time per unit to the nearest whole number.) Number of Cumulative average time Cumulative total time: units per unit: Labor-hours 2 2,635 4 2,240 8 1,904 Direct materials Direct manufacturing labor Variable manufacturing overhead Total variable costs Labor-hours Now calculate the total variable costs of producing 2, 4, and 8 units. Variable costs of producing 4 Units 2 Units 5,270 8,960 15,232 8 Units Data Table Direct material cost Direct manufacturing labor time for first unit Learning curve for manufacturing labor time per radar system Direct manufacturing labor cost Variable manufacturing overhead cost aUsing the formula for an 85% learning curve, b = In 0.85 In 2 Print = $ $ $ - 0.162519 0.693147 88,000 per unit of RS-32 3,100 direct manufacturing labor-hours 85% cumulative average timea 25 per direct manufacturing labor-hour 15 per direct manufacturing labor-hour = 0.234465 Done - X
Transcribed Image Text:Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view data) Requirement Calculate the total variable costs of producing 2, 4, and 8 units. Begin by calculating the total cumulative time in labor-hours. (Round the cumulative average time per unit to the nearest whole number.) Number of Cumulative average time Cumulative total time: units per unit: Labor-hours 2 2,635 4 2,240 8 1,904 Direct materials Direct manufacturing labor Variable manufacturing overhead Total variable costs Labor-hours Now calculate the total variable costs of producing 2, 4, and 8 units. Variable costs of producing 4 Units 2 Units 5,270 8,960 15,232 8 Units Data Table Direct material cost Direct manufacturing labor time for first unit Learning curve for manufacturing labor time per radar system Direct manufacturing labor cost Variable manufacturing overhead cost aUsing the formula for an 85% learning curve, b = In 0.85 In 2 Print = $ $ $ - 0.162519 0.693147 88,000 per unit of RS-32 3,100 direct manufacturing labor-hours 85% cumulative average timea 25 per direct manufacturing labor-hour 15 per direct manufacturing labor-hour = 0.234465 Done - X
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