just part d
California Cucuits Company (3) manufactures a vanety of components its any plant specializes in two sectonic components used In Clicuit boards. These components serve the same function and perform equally well. The difference in the two products is the raw material. The XL-D chip is the older of the two components and is made with a metal that requires a wash porto assembly Ongally the plant released the wastewater directly into a local tiver Several years ago, the company was ordered to treat the wastewater before its release, and it installed relatively expensive equipment. While the equipment is fucy deprecated, annut operating expenses of $247000 are still incurred for wastewater treatment Two years ago, company scientists developed an alloy with all of the properties of the raw materials used in XL-D that generates no wastewater Some prototype components using the new material were produced and tested and found to be indistinguishable from the old components in every way relating to the fitness for use. The only difference is that the new alloy is more expensive than the old raw material. The company has been test marketing the newer version of the component, referred to as XL C and is currently trying to decide its fate Manufacturing of both components begins in the Production Department and is completed in the Assembly Department. No other products are produced in the plant. The following provides information for the two components XL-D XLC Units produced 100, 25,000 Romaterial costs per unit $11.70 513.10 Direct labor-hours per unit-production 0.1 0.1 Direct labor-hours per unit assembly 0.4 0.4 Direct labor rate per hour all labor $18.50 Machine hours per unit-production 1.6 1.6 Machine-hours per unit-Assly 0.4 0.4 Testing hours per unit all in production) 3.0 1. Shipping went per unit (pounds) 1.0 1.6 Wastewater generated per unit (collons) 10. . $8.50 Annual overhead costs for the two departments follow Supervision Material handling Testing wastewater treatment Depreciation on equipment Shipping Total Production Assy Departot Department 397.000 5237,000 91,500 38,500 147,000 247,000 197,000 97.000 5,200 117.000 3906.200 5439.500 The company president believes that it's foolish to continue producing two essentially equivalent products. At the same time, the corporate image is somewhat tanished because of a toxic dump found at another site not the Valley plant. The president would like to be able to point to the Valley plant as an example of company research and development (R&D) working to provide an environment and educt The controller points out to the president that the company's financial position is shaky, and it cannot 6. Current cost accounung system charges overed to products based on direct labor cost using a single plantwiderste What Dot Cou will report for the wo products if the content location system is used b. The controller recently completed an executive odocoon course describing the two-stage locanon drocedure. Assume that the first stage allocales costs to departments and the second stage allocates costs to products. The controller beves the costs will be more accurate machine hours we used to locate Production Department costs and labor hours are used to locate Assembly Department costs What product costs will be reported for the two products of the two-stage location process sted? d. The president argues that an activity based og system would provide even better costs. The company decides to computo producto assuring an ABC system is implemented only in the Production Damen Overhead in Assembly wil continue 10 de ofocated based on direct inbor hours. The cost divers selected for the activity based coding system res obowe Overde Supervision Direct Labor hours waterial handling material cost Testing Testing hours asteater treatment stoute pererated Depreciation opet Machine Hours Shipping What product costs would be reported its ABC Cyste were implemented? Assume that the production mexend costs would remain song planned Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below Required Hapo What product costs would be reported if this ABC system were implemented? Assume that the production mic and costs remains originally blamed ind your intermede tine na to demas) XL-O XLC Raw maand 110 Odbor Product 5 Directory TA 925 7:41 935 O Production Supervision 200 2670 handig TO 123 Testing 117 Waste treatment 2.50 Depreca 390 35 Song Total production and 10 141 20 350 Ovada
