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During the week of June 12, Harrison Manufacturing produced and shipped 18,000 units of its aluminum wheels: 4,000 units of Model A and 14,000 units
During the week of June 12, Harrison Manufacturing produced and shipped 18,000 units of its aluminum wheels: 4,000 units of Model A and 14,000 units of Model B. The cycle time for Model A is 0.80 hours and that of Model B is 0.55 hours. total net work hours for the aluminum wheel value stream for the week were 15,000. The following costs were incurred: Materials Machining Other Total Cost Salaries/ Wages $18,800 269,400 $18,800 25,200 36,500 269,400 25,200 456,300 234,000 $36,800 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing $365,000 140,000 430,000 e $18,000 12,000 41,000 41,000 430,000 11,000 11,000 9,000 9,000 13,400 13,400 Total $935,000 $424,300 $77,800 $30,000 $1,467,100 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. $ 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 $ $ Model B 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 MI Model B During the week of June 12, Harrison Manufacturing produced and shipped 18,000 units of its aluminum wheels: 4,000 units of Model A and 14,000 units of Model B. The cycle time for Model A is 0.80 hours and that of Model B is 0.55 hours. total net work hours for the aluminum wheel value stream for the week were 15,000. The following costs were incurred: Materials Machining Other Total Cost Salaries/ Wages $18,800 269,400 $18,800 25,200 36,500 269,400 25,200 456,300 234,000 $36,800 Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing $365,000 140,000 430,000 e $18,000 12,000 41,000 41,000 430,000 11,000 11,000 9,000 9,000 13,400 13,400 Total $935,000 $424,300 $77,800 $30,000 $1,467,100 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. $ 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 $ $ Model B 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 MI Model B
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