please help me to answer two red circle question! appreciate!!!
Continuous Flow vs. Departmental Manufacturing During the week of August 21, Parley Manufacturing produced and shipped 4,000 units of its machine tools: 1,500 units of Tool SK1 and 2,500 units of Tool SK3. The cycle time for SK1 is 0.73 hour, and the cycle time for SK3 is 0.56 hour. The following costs were incurred: Parley Manufacturing Value-Stream Costs and Production Hours This Week, August 21 Salaries Net Hours Materials Machining Other Total Cost Wages Order processing 400 $4,500 $4,500 Production planning 50 9,000 9,000 Purchasing 200 6,750 6,750 Casting 500 $66,750 36,375 $9,000 $4,500 116,625 Grinding 600 25,000 10,500 10,500 3,000 49,000 Drilling 125 18,750 12,500 31,250 Inspection 150 2,625 2,625 Packaging and shipping 150 2,250 2,250 Invoicing 325 3,000 3,000 Totals 2,500 $110,500 $87,500 $19,500 $7,500 $225,000 Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost. Round your answers to two decimal places. $ 56.25 per unit Complete the statement below on the accuracy of the value computed. The cost is very accurate as the value stream costs all belong to that product 2. Assume that Tool SK1 is responsible for 60% of the materials cost. Calculate the unit cost for Tool SK1 and Tool SK3. Explain the rationale for using units shipped instead of units produced in the calculation. Round your answers to two decimal places. Tool SK1 $ Tool SK3$ Complete the statement below on the accuracy of the Model A and Model B values computed. Complete the statement below that explains the rationale for using units shipped instead of units produced in the calculation. Using units shipped for the unit calculation motivates managers to reduce inventories. 3. Calculate the unit cost for the two models, using DBC. Round your answers to two decimal places. SK1 SK3 Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2. DBC approximates ABC cost assignments, better reflecting the consumption of resources by the two products. In this case, the unit costing approach is reasonably close to the DBC assignments. Continuous Flow vs. Departmental Manufacturing During the week of August 21, Parley Manufacturing produced and shipped 4,000 units of its machine tools: 1,500 units of Tool SK1 and 2,500 units of Tool SK3. The cycle time for SK1 is 0.73 hour, and the cycle time for SK3 is 0.56 hour. The following costs were incurred: Parley Manufacturing Value-Stream Costs and Production Hours This Week, August 21 Salaries Net Hours Materials Machining Other Total Cost Wages Order processing 400 $4,500 $4,500 Production planning 50 9,000 9,000 Purchasing 200 6,750 6,750 Casting 500 $66,750 36,375 $9,000 $4,500 116,625 Grinding 600 25,000 10,500 10,500 3,000 49,000 Drilling 125 18,750 12,500 31,250 Inspection 150 2,625 2,625 Packaging and shipping 150 2,250 2,250 Invoicing 325 3,000 3,000 Totals 2,500 $110,500 $87,500 $19,500 $7,500 $225,000 Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost. Round your answers to two decimal places. $ 56.25 per unit Complete the statement below on the accuracy of the value computed. The cost is very accurate as the value stream costs all belong to that product 2. Assume that Tool SK1 is responsible for 60% of the materials cost. Calculate the unit cost for Tool SK1 and Tool SK3. Explain the rationale for using units shipped instead of units produced in the calculation. Round your answers to two decimal places. Tool SK1 $ Tool SK3$ Complete the statement below on the accuracy of the Model A and Model B values computed. Complete the statement below that explains the rationale for using units shipped instead of units produced in the calculation. Using units shipped for the unit calculation motivates managers to reduce inventories. 3. Calculate the unit cost for the two models, using DBC. Round your answers to two decimal places. SK1 SK3 Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2. DBC approximates ABC cost assignments, better reflecting the consumption of resources by the two products. In this case, the unit costing approach is reasonably close to the DBC assignments
