Question
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing; using the following manufacturing cost pools.
LCI currently sells the B-13 model for $1,925 and the F-32 model for $982. Manufacturing costs and activity usage for the two products are as follows:
B-13 F-32
Direct materials $180.50 $99.90
Number of parts 185.00 115.00
Machine Hours 8.50 7.20
Inspection time 1.75 1.25
Packaging time .75 .50
Set-ups 4.00 1.00
7) The product cost for model B-13 is calculated to be:
Answer: ___________________
8) The product cost for model F-32 is calculated to be:
Answer: ___________________
9) The product margin for model B-13 is calculated to be:
Answer: _____________________
10) The product margin for model F-32 is calculated to be:
Answer: ______________________
Cost Poob 1 Materials handling 2 Manufacturing supervision 3 Assembly 4 Machine setup Alocation Base Number of parts Hours of machine time Number of parts Each setup Logged Hours Logged Hours Costing Rate $2.40 per hour $14.80 per hour $3.30 per part $56.50 per setup $45.50 per hour $19.50 per hour Inspection & testing 6 Packaging
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