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Lens Care Incorporated (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and
Lens Care Incorporated (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: Cost Pools Materials handling Manufacturing supervision Assembly Machine setup Costing Rate Allocation Base Number of parts $ 2.40 per part Hours of machine time $ 14.80 per hour Number of parts Each setup Inspection and testing Packaging Logged hours Logged hours $ 3.30 per part $ 56.50 per setup $ 45.50 per hour $ 19.50 per hour LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows: B-13 Direct materials Number of parts Machine hours Inspection time Packaging time Setups $ 164.50 F-32 $ 75.60 160 120 7.90 4.20 1.70 0.80 0.90 0.50 3.00 2.00 The market price for B-13 and F-32 are reduced to $1,695 and $1,095 respectively. To achieve the target cost, Lens Care plans to reduce materials handling costs. How many parts must be removed from F-32 in order to achieve the target cost for F-32 (round up to whole units)?
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