Exercise 11.18 (Algorithmic) Cost Assignment and JIT Bunker Compary produces two types of glucose monitors (basic and advanced). Both pass through two producing departments: Fabrication and Assembly. Bunker also has an Inspection Department that is respons ble for testing monitors to ensure that they perform within prespecified tolerance ranges (a sampling procedure is used). Budgeted data for the three departments are as follows: InspectionFabricationAssembly S840,000 $238,000 35,000 105,000 Overhead $560,000 Number of tests Direct lebor hours 94,000 42,000 In the Fabrication Department, the basic model requires 1.3 hour(s) of direct labor and the advanced model requires 2.6 hour(s). In the Assembly Department, the basic model requires 1.5 hour(s) of direct labor and the advanced model requires 2.85 hours. There are 52,500 basic units produced and 28,000 advanced units. Immediately after preparing the budgeted data, a consultant suggests that two manufacturing cel's be created: one for the manufacture of the bask model and the other for the manufacture of the advanced 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 s266,000 for the basic cell and $840,000 for the advanced cell Required: 1. Allocate the inspection costs to each department. Assembly Compute the overhead cost per unit for each monitor. Overhead rates use direct labor hours. Round your intermed ate calculations and final answers to the nearest cent. per unit per unit 2. Compute the overhead cost per unit if manufacturing ce ls are creeted. If required, round your intermediate calculations and final answers to the nearest cent. per unit per unit Which unit overhead cost do you think is more accurate-the one computed with a departmental structure, or the one computed using a cell structure? Select your answer Exercise 11.18 (Algorithmic) Cost Assignment and JIT Bunker Compary produces two types of glucose monitors (basic and advanced). Both pass through two producing departments: Fabrication and Assembly. Bunker also has an Inspection Department that is respons ble for testing monitors to ensure that they perform within prespecified tolerance ranges (a sampling procedure is used). Budgeted data for the three departments are as follows: InspectionFabricationAssembly S840,000 $238,000 35,000 105,000 Overhead $560,000 Number of tests Direct lebor hours 94,000 42,000 In the Fabrication Department, the basic model requires 1.3 hour(s) of direct labor and the advanced model requires 2.6 hour(s). In the Assembly Department, the basic model requires 1.5 hour(s) of direct labor and the advanced model requires 2.85 hours. There are 52,500 basic units produced and 28,000 advanced units. Immediately after preparing the budgeted data, a consultant suggests that two manufacturing cel's be created: one for the manufacture of the bask model and the other for the manufacture of the advanced 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 s266,000 for the basic cell and $840,000 for the advanced cell Required: 1. Allocate the inspection costs to each department. Assembly Compute the overhead cost per unit for each monitor. Overhead rates use direct labor hours. Round your intermed ate calculations and final answers to the nearest cent. per unit per unit 2. Compute the overhead cost per unit if manufacturing ce ls are creeted. If required, round your intermediate calculations and final answers to the nearest cent. per unit per unit Which unit overhead cost do you think is more accurate-the one computed with a departmental structure, or the one computed using a cell structure? Select your
