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JIT Features and Product Costing Accuracy Prior to installing a JIT system, Barker Company, a producer of automobile parts, used maintenance hours to assign maintenance
JIT Features and Product Costing Accuracy Prior to installing a JIT system, Barker Company, a producer of automobile parts, used maintenance hours to assign maintenance costs to its three products (wheels, brake pads, and ball bearings). The maintenance costs totaled $5,880,000 per year. The maintenance hours used by each product and the quantity of each product produced are as follows: Maintenance Hours Quantity Produced Wheels 180,000 157,500 Pads 180,000 157,500 Bearings 240,000 210,000 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 $5,880,000; however, these costs are now traceable to each cell as follows: Cell, wheels $1,596,000 Cell, pads 1,764,000 Cell, bearings 2,520,000 Required: 1. Compute the pre-JIT maintenance cost per unit for each product. If required, round your answers to the nearest cent. Wheels per unit Pads $ per unit Bearings $ 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 per unit Pads $ per unit Bearings per unit
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