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Assignmt. 15 Chapter 15 Book Value-Stream Average Costing, DBC, ABC Costs as Benchmarks A value stream has three activities and two products. The units
Assignmt. 15 Chapter 15 Book Value-Stream Average Costing, DBC, ABC Costs as Benchmarks A value stream has three activities and two products. The units produced and shipped per week are 50 of the deluxe model (Model A) and 250 of the basic model (Model 8). The cycle time for Model A is four hours and that of Model B is three hours. The resource consumption patterns are shown as follows: Model A Model B Costs of Value- Stream Activities Cell 2,400 min. 7,400 min. $ 98,000 manufacturing" Engineering Testing 50 hrs 100 hrs 250 hrs. 200 hrs. Tota 42,000 28,200 $150,200 Required: 1. Calculate the ABC product cast for Models A and B. If required, round your answers to the nearest cent. Product Cost Per Unit Model 808 par unit Model 511.2 per unit B 2a. Calculate the value stream average product cost. If required, round your answer to the nearest cent. 561 per unit Zb. Assuming reasonable stability in the consumption patterns of the products and product mix, assess how well the products are grouped based on similarity. The two value-stream products are similar 3. Calculate the unit cost of each product using DBC. Round intermediate calculations and your answers to the nearest cent if rounding is required. Product Cost Per Unit Model 708 per unit A Model 531 par unit 1 How does this compare with the ABC unit costs? Which of the three costing methods would you recommend, and why? The DBC unit costs are both close to the ABC unit costs. This suggests that, in the presence of heterogeneity, using DBC for average 4. Identify the cata analytic types (descriptive, diagnostic, predictive, and prescriptive) that apply for each of the following: Note: See Exhibits 2.5 and 2.6, for a review of data analytic types. casting is better than value-stream costing. a. The calculation of the unit costs by each of the three analytic costing methods. b. Assessing how well the products are grouped based on similarity. c. Comparison of DBC unit costs with ABC unit costs. d. Recommending and explaining which costing method should be used.
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