Value-Stream Costing Objective During the week of June 12, Harrison Manufacturing produced and shipped 16,000 units of its aluminum wheels: 3,200 units of Model A and 12,800 units of Model B. The following costs were incurred: Materials Salaries/ Wages Machining Other Total Cost Order processing $18,200 $18,200 Production planning 220,800 220,800 Purchasing 25,200 25,200 Stamping $355,000 35,500 $36,400 $20,000 446,900 Welding 140,000 40,000 40,000 12,000 232,000 Cladding 290,000 290,000 Testing 10,000 10,000 Packaging and shipping 10,000 10,000 Invoicing 15,000 15,000 Total $785,000 $374,700 $76,400 $32,000 $1,268,100 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. $fill in the blank 1 per unit 2. Calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount. Unit Cost Model A $fill in the blank 2 Model B $fill in the blank 3 3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B. Round your answers to the nearest dollar amount. Unit Cost Model A $fill in the blank 4 Model B $fill in the blank 5 Calculate the total unit cost for Models A and B. Round your interim calculations and final answers to the nearest dollar amount. Unit Cost Model A $fill in the blank 6 Model B $fill in the blank 7
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Value-Stream Costing Objective
During the week of June 12, Harrison Manufacturing produced and shipped 16,000 units of its aluminum wheels: 3,200 units of Model A and 12,800 units of Model B. The following costs were incurred:
| Materials | Salaries/ Wages |
Machining | Other | Total Cost | |||||
| Order processing | $18,200 | $18,200 | |||||||
| Production planning | 220,800 | 220,800 | |||||||
| Purchasing | 25,200 | 25,200 | |||||||
| Stamping | $355,000 | 35,500 | $36,400 | $20,000 | 446,900 | ||||
| Welding | 140,000 | 40,000 | 40,000 | 12,000 | 232,000 | ||||
| Cladding | 290,000 | 290,000 | |||||||
| Testing | 10,000 | 10,000 | |||||||
| Packaging and shipping | 10,000 | 10,000 | |||||||
| Invoicing | 15,000 | 15,000 | |||||||
| Total | $785,000 | $374,700 | $76,400 | $32,000 | $1,268,100 |
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.
$fill in the blank 1 per unit
2. Calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $fill in the blank 2 |
| Model B | $fill in the blank 3 |
3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $fill in the blank 4 |
| Model B | $fill in the blank 5 |
Calculate the total unit cost for Models A and B. Round your interim calculations and final answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $fill in the blank 6 |
| Model B | $fill in the blank 7 |
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