c. Compute the total and unit costs of making the full demand of pool shades, assuming Chandler bases its rates on practical capacity. Also, assume Chandler would make these products one at a time when time is available, so as to not delay any of the custom orders. d. Compute the total and unit costs of making the full demand of trellises, assuming Chandler bases its rates on practical capacity. Also, assume Chandler would make these products one at a time when time is available, so as to not delay any of the custom orders. e. Compute the total and unit costs of making the full demand of pool shades, assuming Chandler bases its rates on expected capacity (used capacity plus required capacity for the full demand of pool shades). Also assume Chandler would make these products one at a time when time is available, so as to not delay any of the custom orders. f. Compute the total and unit costs of making the full demand of trellises, assuming Chandler bases its rates on expected capacity (used capacity plus required capacity for the full demand of trellises). Also, assume Chandler would make these products one at a time when time is available, so as to not delay any of the custom orders. 9 When considering a decision to make the new products, would costs computed using practical capacity (2c and 2d) or expected capacity (2e and 21) as the denominator provide better information to Chandler's management? Explain your answer. D E H J 4 5 Exhibit 1 6 7 8 Existing Capacity Available and Used and capacity Costs Current capacity and usage (annual) Practical Purchased Cost Used Capacity Cost Driver of Capacity Capacity 20,000 design hours $ 500,000.00 19,500 15,000 engineering hr $750,000.00 14,750 40,000 parts $30,000.00 39,000 400,000 square feet $1,800,000.00 210,000 750 job setups $ 756,000.00 640 80,000 machine hrs $2,400,000.00 64,000 9 Resource Design/Drafting Engineering Fabrication Powder coating Scheduling General factory 10 11 12 13 14 15 16 Exhibit 2 Resource needs for potential new products Pool shade Trellis Cost Driver requirements requirements 17 18 10 20 21 22 23 Resource Design/Drafting Engineering Fabrication Powder coating Scheduling General factory design hours engineering hrs parts square feet job setups machine hrs 30 4 40 1600 1 80 20 2 22 170 1 10 24 25 26 27 28 29 30 Selling price per unit Material cost per unit Pool shade 42,500.00 18,750.00 Trellis 4,300.00 700.00 Desired profit on sales Demand Pool shades Demand Trellises 0.30 120 60 31 32 33 71 73 74 75 78 NO 31 10 2c) Compute the total and unit cost of making the full demand of pool shades assuming that Chandler basesisat on practical capacity ABC - Practical Capacity Total Con Activity Pool Shade for Activity Rate Label Required Pool Shades Design/Drafting Engineering Fabrication Powder coating Scheduling General factory costs Mater Total Cost Number of units Unit cost for a Pool Shade 84 Costunit 91 Total Cost 90 Rand Label 96 2d) Compute the total and unit cost of making the full demand of trellises assuming that Chandler basesitate on practical capacity ABC. Practical Capacity Activity Activity Requirement Des Drating Engineering Fabrication Powder coating Scheduling General factory costs Material Total Cost Number of units Unit cost for a Trelis 01 Total cost Costunit 105 05 SOT 109 2e) Compute the total and unit cost of making the full demand of pool shades assuming that Chandler bases is rates 410 on expected capacitylused capacity plus required capacity for the full demand of pool shades ABC Expected Capacity Current Total Total Cost 112 Cost of Expected Pool Shade for 113 Activity Resource Capacity Rate Label Requirement Pool Shades Desien Drafting 115 Engineering Fabrication 11 Powdercoating 118 Scheduling 119 General factory costs 20 Material 21 TotalCoM Number of units Unit cost for a Pool Shade Toal.com Units Cos/unit Total Cost Cost of 126 21) Compute the total and unit cost of making the full demand of trelises assuming that Chandler bases its rates on expected capacity (used capacity plus required capacity for the full demand of trellises ABC Expected Capacity Current Expected Activity Resource Capacity Rate Label Require Letting Engineering Fabrication 1344 Powder coating Sheduling General factory.com ST Material Total Cost Number of units SO Unit cost for a Tres Total cost its Costunit 2