Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cost Assignment and JIT Bunker Company produces two types of qlucose monitors (basic and advanced), Both pass through two producing departments: Fabrication and Assembly. Bunker

image text in transcribed
image text in transcribed
Cost Assignment and JIT Bunker Company produces two types of qlucose monitors (basic and advanced), Both pass through two producing departments: Fabrication and Assembly. Bunker also has an Inspection Department that is responsible for testing monitors to ensure that they perform within prespecified toierance ranges (a sampling procedure is used). Budgeted dota for the three departments are as follows: In the Fabrication Department, the bosic model requires 0.8 hour( 5 ) of direct labor and the advanced model requires 1.6 hour(s). In the Assembly Department, the basic model requires 1 hour(s) of direct labor and the advanced model requires 1.85 hours. There are 45,000 basic units produced and 24,000 advanced units. Immediately ater preparing the budgeted data, a consultant suggests that two manufacturing cells be created: one for the manufacture of the basic model and the other for the manufacture of the advanced model. Raw materiais would be delivered to each cell, and goods would be shipped immediately to customers upon completion. Workers within esch cell would also be trained to perform monitor testing. The total direct overhead costs estimated for each cell would be $228,000 for the basic cell and 5720,000 for the acivanced cell. Requredt 1. Alocate the inspection corts to each department. Compite the overhead cost per unit for each monitor, Overhead rates use direct labor hours, Round your intermediate calculations and final answers to the nearest cent. In the Fabricatian Department, the basic model requires 0.8 hour(s) of direct labor and the advanced model requires 1.6 hour(s). In the Assembly Department, the model requires 1 hour(s) of direct tabor and the advanced model requires 1.85 hours. There are 45,000 basic units produced and 24,000 advanced units. Immediately after preparing the budgeted data, a consuitant suggests that two manufacturing cells be created: one for the manufacture of the basic model and the for the manufacture of the adyanced model. Raw materials would be dellvered to each cell, and goods would be shipped immediately to customers upon completion: Workers within each cell would also be trained to perform monitor testing. The total direct overhead costs estimated for each cell would be $228,000 for the basic ce $720,000 for the advanced cell. Required: 1. Aliocate the inspection costs to each department. Comoute the overhead cost per unit for each monitot. Overhead rates use direct labor hours. Round your intermediate calculations and final answers to the nearest cent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions