Post a listing of recommendations - with full explanations - regarding areas of possible cost savings for the company. Include recommendations for at least four of the six activities, and your targeted savings is at least $1 million (~ 25%). Be specific and explain how the cost savings will be achieved. Activities that can be reduced listed on the picture. PredeterminedEstimatedAnnualRate per Unitof ActivityEstimated TotalActivity (Cost Driver)CostActivity$ 135,0002,140,000$ 750/order2,140/setup250/receipt180 ordersProduction order preparationHull and deck mold setupRaw material acquisitionMaterial handlingQuality inspectionClean up and waste disposalTotal manufacturing overhead1,000 setups2,600 receipts650,000450,0009,000 moves50/move6,000 inspections250 loads125/inspection300Лоad750,00075,000$4,200,000

The question lists out 6 activity cost drivers which contribute to the manufacturing overhead of the…

Answered: Post a listing of recommendations -…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Post a listing of recommendations - with full explanations - regarding areas of possible cost savings for the company. Include recommendations for at least four of the six activities, and your targeted savings is at least $1 million (~ 25%). Be specific and explain how the cost savings will be achieved. Activities that can be reduced listed on the picture.

Predetermined
Estimated
Annual
Rate per Unit
of Activity
Estimated Total
Activity (Cost Driver)
Cost
Activity
$ 135,000
2,140,000
$ 750/order
2,140/setup
250/receipt
180 orders
Production order preparation
Hull and deck mold setup
Raw material acquisition
Material handling
Quality inspection
Clean up and waste disposal
Total manufacturing overhead
1,000 setups
2,600 receipts
650,000
450,000
9,000 moves
50/move
6,000 inspections
250 loads
125/inspection
300Лоad
750,000
75,000
$4,200,000

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