Nonvalue-Added Costs. HomeTech Manufacturing, Inc. specializes in making products that represent the latest materials and technologies available. The company has a reputation for excellent quality and for entering the market with the best products at reasonable prices.
The Cookware Division has two product lines: Chefs Delight, a 9-piece set, and Gourmet Ease, a 20 -piece set. Chef's Delight is top quality, featuring anodized solid-spun aluminum for fast, even heat conductivity and a satin finish for easy cleaning. It has bright stainless steel lids and nickel-plated cast iron handles. Stamping operations are needed for the pots, frying pans, and lids. Handles attached to all pots and pans require a molding operation. The handles for each lid are made from stainless steel rods that are bent to shape and flattened where attached to lids. In finishing and assembly, holes are drilled into each pot, pan, and lid so handles can be attached with screws. The pieces are polished and assembled and placed in the finished goods marehouse.
The production costs for the set of Chefs Delight are as follows:

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Materials..... Stamping and molding: Direct labor. Overhead Finishing and assembly: Direct labor. Overhead Total Total 9 Pieces Average Per Piece $ 92.70 $10.30 10.80 1.20 32.40 3.60 18.00 2.00 27.00 3.00 $180.90 $20.10