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Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered
Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable, while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer intern has suggested that the cost system might be providing misleading information. The controller decided that a good summer project for the intern would be to develop, in one self-contained area of the plant, an alternative cost system with which to compare the current system. The intern identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were: In this particular area, Cain produces two of its many products: Standard and Deluxe. The following are data for production for the latest full year of operations. he intern decides to look more closely at the manufacturing activity and determines that it can be broken down into two activities: roduction and engineering. Production covers the costs of ongoing manufacturing while engineering includes those activities lealing with engineering changes, design modifications, and so on. he costs attributed to production are \\( \\$ 7,338,750 \\) and the costs attributed to engineering are \\( \\$ 5,400,000 \\). After discussion with lant engineers, the intern decides that the best cost driver for engineering is setups, because most of the work arises from hanges in the way the product is run. Required: a-1. Compute the totals of the cost driver rates shown below. a-2. What unit product costs will be reported for the two products if the revised \\( A B C \\) system is used? Complete this question by entering your answers in the tabs below. What unit product costs will be reported for the two products if the revised ABC system is used? (Round \"Unit cost\" answers to 2 decimal places.) Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable, while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer intern has suggested that the cost system might be providing misleading information. The controller decided that a good summer project for the intern would be to develop, in one self-contained area of the plant, an alternative cost system with which to compare the current system. The intern identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were: In this particular area, Cain produces two of its many products: Standard and Deluxe. The following are data for production for the latest full year of operations. he intern decides to look more closely at the manufacturing activity and determines that it can be broken down into two activities: roduction and engineering. Production covers the costs of ongoing manufacturing while engineering includes those activities lealing with engineering changes, design modifications, and so on. he costs attributed to production are \\( \\$ 7,338,750 \\) and the costs attributed to engineering are \\( \\$ 5,400,000 \\). After discussion with lant engineers, the intern decides that the best cost driver for engineering is setups, because most of the work arises from hanges in the way the product is run. Required: a-1. Compute the totals of the cost driver rates shown below. a-2. What unit product costs will be reported for the two products if the revised \\( A B C \\) system is used? Complete this question by entering your answers in the tabs below. What unit product costs will be reported for the two products if the revised ABC system is used? (Round \"Unit cost\" answers to 2 decimal places.)
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