Question
Use the following to answer questions 7-10: Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly
Use the following to answer questions 7-10:
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 $1,875 and the F-32 model for $1,101. Manufacturing costs and activity usage for the two products are as follows:
B-13 F-32
Direct materials $190.50 $117.90
Number of parts 200.00 128.00
Machine Hours 9.00 8.50
Inspection time 1.75 1.00
Packaging time .75 .50
Set-ups 4.00 2.00
7) The product cost for model B-13 is calculated to be:
8) The product cost for model F-32 is calculated to be:
9) The product margin for model B-13 is calculated to be:
10) The product margin for model F-32 is calculated to be:
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