Sam plans to make 15,000 team kits, 6,000 tennis racquets, and 2,000 badminton racquets. Anna has told Sam that it takes the labour hours presented in Table 11.5 to manufacture and string the tennis and badminton racquets.

Required:

a) Calculate the rate to be used for charging out team kits, using the total department cost and the number of team kits to be made. (Hint: this is just like the blanket rate, but for one department.)

b) Calculate the total estimated machine hours needed in the frame-making department and total estimated labour hours needed in the racquet-stringing department.

c) Calculate an appropriate departmental rate for the frame-making and racquetstringing departments, using the total department cost and dividing it by the appropriate number of hours planned for each department (Stage 4 in Figure 11.1).

d) Use the departmental rate to cost a team kit, tennis racquet, and badminton racquet, and complete Table 11.6 (Stage 5 in Figure 11.1). Compare these to the costs calculated in Demonstration Exercise 11.1. Explain why they are different. The solution for tennis racquets has been given as an example.

Transcribed Image Text:

Table 11.5 Machine and labour hours by department Tennis racquet 0.25 0.5 Badminton racquet 0.25 1.0 Frame-machine hours Racquet-stringing labour hours