Question
JIT Features and Product Costing Accuracy Prior to installing a JIT system, Buckner Company, a producer of automobile parts, used maintenance hours to assign
JIT Features and Product Costing Accuracy Prior to installing a JIT system, Buckner Company, a producer of automobile parts, used maintenance hours to assign maintenance costs to its three products (wheels, rims, and ball bearings). The maintenance costs totaled $7,434,840 per year. The maintenance hours used by each product and the quantity of each product produced are as follows: Wheels Rims Bearings Maintenance Hours Quantity Produced 195,000 195,000 246,000 170,625 170,625 215,250 After installing JIT, three manufacturing cells were created, and cell workers were trained to perform preventive maintenance and minor repairs. A full-time maintenance person was also assigned to each cell. Maintenance costs for the three cells still totaled $7,434,840; however, these costs are now traceable to each cell as follows: Cell, wheels Cell, rims Cell, bearings Required: $2,105,150 2,279,550 3,050,140 1. Compute the pre-JIT maintenance cost per unit for each product. If required, round your answers to the nearest cent. Wheels Rims Bearings 9.8 X per unit 11.20 X per unit 11.20 X per unit 2. Compute the maintenance cost per unit for each product after installing JIT. If required, round your answers to the nearest cent. Wheels 10.13 X per unit Rims 11.20 X per unit Bearings 12.00 X per unit Feedback
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