Required: Estimate the nonvalue-added cost for each situation. a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is $12, the cost per machine hour is $8, al the cost per pound of materials is $10. per unit b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is $50. per setup C. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is $20. per unit tios, Activity Rat Exercise 5-49 Product-Costing Accuracy, Consumption Ratios, Activit Activity Costing Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry forces. The soldiers are produced by using one continuous process. Four activities Identified: machining, setups, receiving, and packing. Resource drivers have been sign costs to each activity. The overhead activities, their costs, and the other related der follows: Packing Ord Product Infantry Special forces Costs Machine Hours 20,000 20,000 $80,000 Setups 300 100 $24,000 Receiving Orders 900 100 $18,000 1,600 800 $30,000 Required: 1. Calculate the total overhead assigned to each product by using only machine hours calculate a plantwide rate. 2. Calculate consumption ratios for each activity. (Round to two decimal places.) 3. Calculate a rate for each activity by using the associated driver. (Round to two decin places.) 4. Assign the overhead costs to each product by using the activity rates computed in Requirement 3. 5. CONCEPTUAL CONNECTION Comment on the difference between the assign Requirement 1 and the activity-based assignment. Required: Estimate the nonvalue-added cost for each situation. a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is $12, the cost per machine hour is $8, al the cost per pound of materials is $10. per unit b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is $50. per setup C. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is $20. per unit tios, Activity Rat Exercise 5-49 Product-Costing Accuracy, Consumption Ratios, Activit Activity Costing Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry forces. The soldiers are produced by using one continuous process. Four activities Identified: machining, setups, receiving, and packing. Resource drivers have been sign costs to each activity. The overhead activities, their costs, and the other related der follows: Packing Ord Product Infantry Special forces Costs Machine Hours 20,000 20,000 $80,000 Setups 300 100 $24,000 Receiving Orders 900 100 $18,000 1,600 800 $30,000 Required: 1. Calculate the total overhead assigned to each product by using only machine hours calculate a plantwide rate. 2. Calculate consumption ratios for each activity. (Round to two decimal places.) 3. Calculate a rate for each activity by using the associated driver. (Round to two decin places.) 4. Assign the overhead costs to each product by using the activity rates computed in Requirement 3. 5. CONCEPTUAL CONNECTION Comment on the difference between the assign Requirement 1 and the activity-based assignment
