Check my work Integrative Cases 6-63 (Algo) Product Costing and Decision Making (LO 6-1, 2, 3, 4) Brunswick Parts is a small manufacturing firm located in eastern Canada. The company, founded in 1947, produces metal parts for many of the larger manufacturing firms located in both Canada and the United States. It prides itself on high quality and customer service, and many of its customers have been buying at least some of their parts from Brunswick since the 1950s. Production of the parts takes place in one of two plants. The older plant, located in Fredericton, was purchased when the company was founded, and the last major improvements to the plant took place in the 1970s. A newer plant, located in Moncton, was built in 1995 to take advantage of the expanding markets. The same part can be produced in either plant, and the final scheduling decision is based on capacity, transportation costs, and production costs. At a weekly production meeting, Sara Hunter, the manufacturing manager expresses her frustration at trying to schedule production. Something isn't right. We build a new plant to take adlantage of new manufacturing technology and we struggle to keep it filled. We didn't have this problem a few years ago when we couldn't keep up with demand, but with the current economy, marketing keeps sending orders to the old plant in Fredericton. I know manufacturing, but I guess I must not understand accounting. The latest order that generated discussion among plant management was placed by Lawrence Machine Tool Company, a long-time customer. The order called for 1.000 units of a special rod (P28) used in one of its many ents (50 points) Saved Help Save & Exit Submit Check my work The latest order that generated discussion among plant management was placed by Lawrence Machine Tool Company, a long-time customer. The order called for 1,000 units of a special rod (P28) used in one of its many products. The order was received by the marketing department. Following the established procedure at Brunswick, the marketing manager checked the product costs for both plants. Because quality and transportation costs would be the same from either plant, a decision was made to produce and ship from the Fredericton plant. The cost system at Brunswick is a traditional manufacturing cost system. Plant overhead (including plant depreciation) is allocated to products based on estimated production for the period. Separate overhead rates are computed for each plant Corporate administration costs are allocated to the plants based on the estimated production in the plant for purposes of executive performance measurement Production is measured by direct labor-hours. Cost and production information for P28 follows. Per unit of P28 Direct material (1 kilogram @ $22) Direct labor-hours Direct labor wage rate Moncton $22 4 hours $9 Fredericton $22 5 hours $10 Corporate and plant overhead budgets are as follows: Corporate Administration Moncton Fredericton Corporate Marketing R&D Depreciation General administration Plant overhead before corporate allocations): $165,000 115,000 115,000 165,000 7:05 ments (50 points) Saved Help Save & Exit Submit Check my work Corporate and plant overhead budgets are as follows: Corporate Administration Moncton Fredericton $165,000 115,000 115,000 165,000 Corporate Marketing R&D Depreciation General administration Plant overhead (before corporate allocations): Supervision Indirect labor Depreciation Miscellaneous Total Estimated production (direct labor-hours) : $ 115,000 215,000 791,000 115,000 $1,236,000 103,000 $ 165,000 367,000 65,000 165,000 $ 762,000 127,000 nces $560,000 Required: a. What would be the reported product cost of P28 per unit for the two plants? Product Cost per unit Moncton Fredericton per unit TO Total $560,000 $1,236,000 103,000 $ 762,000 127,000 Estimated production (direct labor-hours): Required: a. What would be the reported product cost of P28 per unit for the two plants? Product Cost per unit ces Moncton Fredericton per unit b. At what plant should the P28 units for the Lawrence order be produced? O Moncton O Fredericton