Part A Tupper Co. produced a pilot run of one hundred units of a recently developed piston used in one of its products. Tupper expected to produce and sell 2.000 units annually. The pilot run required an average of .75 direct labor hours per piston for these 100 pistons. Tupper expects to experience a seventy percent learning curve on the direct labor hours needed to produce the next batches of new pistons. However, past experience indicates that learning tends to cease by the time 1,600 pistons are produced. Tupper's manufacturing costs for pistons are presented below. Direct labor Overhead $15.00 per direct labor hour 7.00 per direct labor hour 15.00 per unit Materials Tupper received a quote of $22 per unit from Machine Co. for the additional 1,900 pistons needed. Tupper frequently subcontracts this type of work and has always been satisfied with the quality of the units produced by Machine co. If 1,600 pistons are manufactured by Tupper Co., what will the cost per unit be? Will the cost per unit be higher or lower if 2,000 units are manufactured? Explain. Part B Briefly describe the concept "Value Engineering! Why it important that the Cost Accountant be involved in discussions on issues related to Value Engineering? Part A Tupper Co. produced a pilot run of one hundred units of a recently developed piston used in one of its products. Tupper expected to produce and sell 2.000 units annually. The pilot run required an average of .75 direct labor hours per piston for these 100 pistons. Tupper expects to experience a seventy percent learning curve on the direct labor hours needed to produce the next batches of new pistons. However, past experience indicates that learning tends to cease by the time 1,600 pistons are produced. Tupper's manufacturing costs for pistons are presented below. Direct labor Overhead $15.00 per direct labor hour 7.00 per direct labor hour 15.00 per unit Materials Tupper received a quote of $22 per unit from Machine Co. for the additional 1,900 pistons needed. Tupper frequently subcontracts this type of work and has always been satisfied with the quality of the units produced by Machine co. If 1,600 pistons are manufactured by Tupper Co., what will the cost per unit be? Will the cost per unit be higher or lower if 2,000 units are manufactured? Explain. Part B Briefly describe the concept "Value Engineering! Why it important that the Cost Accountant be involved in discussions on issues related to Value Engineering
