5) In the case, Exhibit 16 illustrates a breakdown of the product costs. The target cost was $50, and currently, Moraine would be 21% above the target price, and Tianjin would be 19% below (pg 7). However, Li felt strongly that improvements could be made to both plants. Specifically, Li thought that yield should improve to 93% at Moraine and to 95% for Tianjin. She also thought that both could increase output to 800 units per shift. Finally, she thought that Moraine could reduce the line to 50 employees per line. If she is right, then will change the total costs for both plants. Fill out the "after" columns in the table below to reflect the new cost if these improvements are made. Product cost Impacted by: Tianjin after Raw materials Labor Electricity Depreciation Other mfg costs SG&A Pack & tranpo TOTAL COST yield yield, output, employees yield yield, output yield yield, output None Moraine before $19.90 $23.93 $1.58 $3.17 $1.73 $8.00 $2.13 $60.44 Moraine Tianjin after before $13.01 $2.28 $1.55 $1.55 $.88 $6.00 $15.33 $40.60 Exhibit 16 Comparison of Total Costs per Windshield: Tianjin versus Moraine Cost (US$ unless otherwise specified) Item Tianjin Moraine Target Cost Raw materials $13.01 $19.90 Labor 2.28 23.93 1.58 Electricity 1.55 Depreciation 1.55 3.17 0.88 1.73 Other manufacturing costs SG&A 6.00 8.00 15.33 2.13 Packaging and transportation Total 40.60 60.44 550.00 Moraine Other Cost Factors Tianjin 93% 81% Yield 91% 81% First-pass yield - Rework and repair 2% No repair -Lack of skills -Low productivity Output per shift 780 pairs 650 pairs Salary per month CNY5,000/month $25/hr. Working hours per month 8 hr./day, 25 days 8 hr./day, 22 days 57 63 Number of workers per line CNY 0.69 $0.0600 Electricity, cost per kilowatt-hr. Source: Compiled from company data. Note: Other cost factors such as output per shift, salary per month, working hours, number of workers per line, and electricity costs apply to gross output before yield is calculated. Purchased parts and 17% VAT not included: Chin VAT on FOB price 100% is refunded for exports: $1-CNY 69. 5) In the case, Exhibit 16 illustrates a breakdown of the product costs. The target cost was $50, and currently, Moraine would be 21% above the target price, and Tianjin would be 19% below (pg 7). However, Li felt strongly that improvements could be made to both plants. Specifically, Li thought that yield should improve to 93% at Moraine and to 95% for Tianjin. She also thought that both could increase output to 800 units per shift. Finally, she thought that Moraine could reduce the line to 50 employees per line. If she is right, then will change the total costs for both plants. Fill out the "after" columns in the table below to reflect the new cost if these improvements are made. Product cost Impacted by: Tianjin after Raw materials Labor Electricity Depreciation Other mfg costs SG&A Pack & tranpo TOTAL COST yield yield, output, employees yield yield, output yield yield, output None Moraine before $19.90 $23.93 $1.58 $3.17 $1.73 $8.00 $2.13 $60.44 Moraine Tianjin after before $13.01 $2.28 $1.55 $1.55 $.88 $6.00 $15.33 $40.60 Exhibit 16 Comparison of Total Costs per Windshield: Tianjin versus Moraine Cost (US$ unless otherwise specified) Item Tianjin Moraine Target Cost Raw materials $13.01 $19.90 Labor 2.28 23.93 1.58 Electricity 1.55 Depreciation 1.55 3.17 0.88 1.73 Other manufacturing costs SG&A 6.00 8.00 15.33 2.13 Packaging and transportation Total 40.60 60.44 550.00 Moraine Other Cost Factors Tianjin 93% 81% Yield 91% 81% First-pass yield - Rework and repair 2% No repair -Lack of skills -Low productivity Output per shift 780 pairs 650 pairs Salary per month CNY5,000/month $25/hr. Working hours per month 8 hr./day, 25 days 8 hr./day, 22 days 57 63 Number of workers per line CNY 0.69 $0.0600 Electricity, cost per kilowatt-hr. Source: Compiled from company data. Note: Other cost factors such as output per shift, salary per month, working hours, number of workers per line, and electricity costs apply to gross output before yield is calculated. Purchased parts and 17% VAT not included: Chin VAT on FOB price 100% is refunded for exports: $1-CNY 69