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During the week of June 12, Harrison Manufacturing produced and shipped 17,600 units of its aluminum wheels: 4,000 units of Model A and 13,600 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 $18,000 121,200 26,100 38 $370,000 37,000 $37,600 150,000 42,000 42,000 75,000 10,000 10,000 13,200 $277,500 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total 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. per unit Model A Model B Other Total Cost $18,000 121,200 $595,000 Model A Model B $19,600 12,000 $79,600 $31,600 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. Unit Cost 26,100 464,200 246,000 75,000 10,000 10,000 13,200 $983,700 3. What if Model A 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. Unit Cost

During the week of June 12, Harrison Manufacturing produced and shipped 17,600 units of its aluminum wheels: 4,000 units of Model A and 13,600 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 $18,000 121,200 26,100 38 $370,000 37,000 $37,600 150,000 42,000 42,000 75,000 10,000 10,000 13,200 $277,500 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total 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. per unit Model A Model B Other Total Cost $18,000 121,200 $595,000 Model A Model B $19,600 12,000 $79,600 $31,600 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. Unit Cost 26,100 464,200 246,000 75,000 10,000 10,000 13,200 $983,700 3. What if Model A 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. Unit Cost

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Value-Stream Costing Objective During the week of June 12, Harrison Manufacturing produced and shipped 17,600 units of its aluminum wheels: 4,000 units of Model A and 13,600 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 $18,000 121,200 26,100 GF $370,000 37,000 $37,600 150,000 42,000 42,000 75,000 10,000 10,000 13,200 $277,500 $79,600 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total $595,000 Model A Model B Other Model A Model B $19,600 12,000 $31,600 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. $ per unit DBC should be used if the products Total Cost 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. Unit Cost $18,000 121,200 26,100 464,200 246,000 75,000 10,000 10,000 13,200 $983,700 3. What if Model A 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. Unit Cost 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. homogeneous products. Even when the products are , it is to use. DBC more accurate as it approximates ABC assignments.
Transcribed Image Text:Value-Stream Costing Objective During the week of June 12, Harrison Manufacturing produced and shipped 17,600 units of its aluminum wheels: 4,000 units of Model A and 13,600 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 $18,000 121,200 26,100 GF $370,000 37,000 $37,600 150,000 42,000 42,000 75,000 10,000 10,000 13,200 $277,500 $79,600 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing Total $595,000 Model A Model B Other Model A Model B $19,600 12,000 $31,600 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. $ per unit DBC should be used if the products Total Cost 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. Unit Cost $18,000 121,200 26,100 464,200 246,000 75,000 10,000 10,000 13,200 $983,700 3. What if Model A 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. Unit Cost 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. homogeneous products. Even when the products are , it is to use. DBC more accurate as it approximates ABC assignments.
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