During the week of June 12, Harrison Manufacturing produced and shipped 17,200 units of its aluminum wheels: 3,600 units of Model A and 13,600 units of Model B. The cycle time for Model A is 0.80 hours and that of Model B is 0.55 hours. The total net work hours for the aluminum wheel value stream for the week were 15,000. The following costs were incurred:

	Materials		Salaries/ Wages		Machining		Other		Total Cost
Order processing			$19,600						$19,600
Production planning			40,800						40,800
Purchasing			25,200						25,200
Stamping	$380,000		38,000		$36,400		$18,200		472,600
Welding	140,000		40,000		40,000		12,000		232,000
Cladding	245,000								245,000
Testing			11,000						11,000
Packaging and shipping			8,000						8,000
Invoicing			14,400						14,400
Total	$765,000		$197,000		$76,400		$30,200		$1,068,600

Required:

1. Assume initially that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost. Round your answer to the nearest dollar amount. $fill in the blank 1 per unit

2. Model A is responsible for 40 percent of the materials cost. Using the average conversion cost approach, calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount.

	Unit Cost
Model A	$fill in the blank 2
Model B	$fill in the blank 3

3. What if Model A and Model B are not homogeneous products? Assume the same materials usage as in Requirement 2. Use DBC to calculate the unit cost for the two products. Round your interim calculations and final answers to the nearest dollar amount.

	Unit Cost
Model A	$fill in the blank 4
Model B	$fill in the blank 5

Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2. Explain why DBC is a good approach for value-stream costing.

DBC should be used if the products

areare not

homogeneous products. Even when the products are

homogeneousheterogeneity

, it is

simple and easyhard and complex

to use. DBC

isis not

more accurate as it approximates ABC assignments.