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
Chapter1: Financial Statements And Business Decisions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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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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