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During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its aluminum wheels: 3,000 units of Model A and 12,000 units of Model B. The following costs were incurred: 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, and comment on its accuracy. 2. Calculate the unit cost for Models A and B, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. What if Model A is responsible for 40 percent of the materials cost? Show how the unit cost would be adjusted for this condition.

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Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663
BuyFind

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663

Solutions

Chapter
Section
Chapter 15, Problem 2CE
Textbook Problem

During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its aluminum wheels: 3,000 units of Model A and 12,000 units of Model B. The following costs were incurred:

Chapter 15, Problem 2CE, During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its aluminum

Required:

  1. 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, and comment on its accuracy.
  2. 2. Calculate the unit cost for Models A and B, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation.
  3. 3. What if Model A is responsible for 40 percent of the materials cost? Show how the unit cost would be adjusted for this condition.

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Chapter 15 Solutions

Cornerstones of Cost Management (Cornerstones Series)
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Ch. 15 - When will the average unit cost be useful for...Ch. 15 - Explain why changes in value-stream profitability...Ch. 15 - Define total productive efficiency.Ch. 15 - Explain the difference between technical and...Ch. 15 - What is productivity measurement?Ch. 15 - Explain the difference between partial and total...Ch. 15 - What is an operational productivity measure? A...Ch. 15 - Discuss the advantages and disadvantages of...Ch. 15 - What is the purpose of a base period?Ch. 15 - What is profile measurement and analysis? What are...Ch. 15 - What is profit-linked productivity measurement and...Ch. 15 - Explain why profit-linked productivity measurement...Ch. 15 - What is the price-recovery component?Ch. 15 - Anderson Company has the following departmental...Ch. 15 - During the week of June 12, Harrison Manufacturing...Ch. 15 - In 20x2, Choctaw Company implements a new process...Ch. 15 - Refer to Cornerstone Exercise 15.3. Choctaw...Ch. 15 - Helix, Inc., formed the following matrix for its...Ch. 15 - Bienestar Inc., has the following departmental...Ch. 15 - Bienestar, Inc., implemented cellular...Ch. 15 - Henderson, Inc., has just created five order...Ch. 15 - A value stream has three activities and two...Ch. 15 - Shorts Manufacturing, Inc., has implemented lean...Ch. 15 - The following Box Scorecard was prepared for a...Ch. 15 - Listed below are several possible input...Ch. 15 - Carsen Company produces handcrafted pottery that...Ch. 15 - Helena Company needs to increase its profits and...Ch. 15 - Helena Company needs to increase its profits and...Ch. 15 - Holbrook Company gathered the following data for...Ch. 15 - Lean manufacturing is characterized by all but one...Ch. 15 - Lean manufacturing uses value streams to produce a...Ch. 15 - A manufacturing cell within a value stream is...Ch. 15 - Total productive efficiency is achieved when both...Ch. 15 - The following information is given for a...Ch. 15 - Sixty employees (all CPAs) of a local public...Ch. 15 - Sixty employees (all CPAs) of a local public...Ch. 15 - Bradford Company, a manufacturer of small tools,...Ch. 15 - Continuous improvement is the governing principle...Ch. 15 - Analytic Company is considering the acquisition of...Ch. 15 - Jadlow Company produces handcrafted leather...Ch. 15 - In 20x1, Fleming Chemicals used the following...

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