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During the week of May 10, American Aluminum Company produced and shipped 16,000 units of its aluminum wheels; 4,000 units of Model A and 12,000
During the week of May 10, American Aluminum Company produced and shipped 16,000 units of its aluminum wheels; 4,000 units of Model A and 12,000 units of Model B. The following costs and production hours were incurred Other Net Hours 1,600 100 $ Order processing Production planning Purchasing Stamping Welding Cladding Inspection Packing and Shipping Invoicing Totals 800 2,000 2,400 500 600 600 1,400 10,000 American Aluminum Value -Stream Costs and Production Hours Week of May 10 Materials Salaries Machining $ 18,000 $ 36,000 $ 27,000 $ 267,000 $ 145,500 $ 36,000 $ $ 100,000 $ 42,000 $ 42,000 $ $ 75,000 $ 50,000 $ 10,500 $ 9,000 $ 12,000 $ 442,000 $ 350,000 $ 78,000 $ $ $ 18,000 $ 12,000 $ $ $ $ Total Cost 18,000 36,000 27,000 466,500 196,000 125,000 10,500 9,000 12,000 900,000 $ 30,000 $ 1. Assume that the value-stream costs and total units shipped apply only to one model (a single- product value stream). Calculate the unit cost per unit 10 points 2. Now, assume that Model A is responsible for 40% of the materials cost. Calculate the unit cost for Models A and B. Hint: first calculate unit cost for materials for each Model, then calculate the average unit conversion cost (which applies to both) and then use those values to find the total unit cost for each model. Unit cost for materials: Model A Model B Average Unit conversion cost: Total Model Unit Cost: Model A Model B
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