IT Features and Product Costing Accuracy Prior to installing a JIT system, Buckner Company, a producer of automobile parts, used maintenance hours to assign maintenance costs to its three products (wheels, rims, and ball bearings). The maintenance costs totaled $4,852,960 per year. The maintenance hours used by each product and the quantity of each product produced are as follows: Maintenance Hours Quantity Produced Wheels 198,000 173,250 Rims 198,000 173,250 Bearings 223,000 195,125 After installing JIT, three manufacturing cells were created, and cell workers were trained to perform preventive maintenance and minor repairs. A full-time maintenance person was also assigned to each cell. Maintenance costs for the three cells still totaled $4,852,960; however, these costs are now traceable to each cell as follows: Cell, wheels $1,392,520 Cell, rims 1,552,320 Cell, bearings 1,908,120
JIT Features and Product Costing Accuracy
Prior to installing a JIT system, Buckner Company, a producer of automobile parts, used maintenance hours to assign maintenance costs to its three products (wheels, rims, and ball bearings). The maintenance costs totaled $4,852,960 per year. The maintenance hours used by each product and the quantity of each product produced are as follows:
Maintenance Hours | Quantity Produced | |
Wheels | 198,000 | 173,250 |
Rims | 198,000 | 173,250 |
Bearings | 223,000 | 195,125 |
After installing JIT, three manufacturing cells were created, and cell workers were trained to perform preventive maintenance and minor repairs. A full-time maintenance person was also assigned to each cell. Maintenance costs for the three cells still totaled $4,852,960; however, these costs are now traceable to each cell as follows:
Cell, wheels | $1,392,520 |
Cell, rims | 1,552,320 |
Cell, bearings | 1,908,120 |
Required:
1. Compute the pre-JIT maintenance cost per unit for each product. If required, round your answers to the nearest cent.
Wheels | $fill in the blank 1 per unit |
Rims | $fill in the blank 2 per unit |
Bearings | $fill in the blank 3 per unit |
2. Compute the maintenance cost per unit for each product after installing JIT. If required, round your answers to the nearest cent.
Wheels | $fill in the blank 4 per unit |
Rims | $fill in the blank 5 per unit |
Bearings | $fill in the blank 6 per unit |
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