Value-Stream Average Costing, ABC Costs as Benchmarks

A value stream has three activities and two products. The units produced and shipped per week are 50 of the deluxe model (Model A) and 150 of the basic model (Model B). The resource consumption patterns are shown as follows:

Model A Model B Costs of Value-Stream Activities

Solutions Mixing Heating 30 1 Tableting Bottling 12 10 14 Since it is operating under continuos basis, therefore, Lets assume it is operating now, therefore when a particular units get produced the WIP is into heating and has already completed 6 mins, so the 6 mins of heating, 10 mins of tableting and 14 mins of bottling. Thereafter every unit will take 30 mins Therefore, in an hour it can produce 2 units 2 A cell requires 30 mins to produce a unit, assuming it is producing on a continuous basis. y completed 6 mins, so the next unit will need 30 mins to get completed will take 30 mins Value-Stream Average Costing, ABC Costs as Benchmarks A value stream has three activities and two products. The units produced and shipped per week are 50 of the deluxe model (Model A) and 150 of the basic model (Model B). The resource consumption patterns are shown as follows: Model A Model B Costs of ValueStream Activities Cell manufact uring Engineeri ng Testing 2,450 min. 7,350 min. $### 55 hrs. 220 hrs. ### 100 hrs. 220 hrs. ### Total $### Required: 1. Calculate the ABC product cost for Models A and B. If required, round your answers to the nearest cent. Product Cost Per Unit Model A $ per unit Model B $ per unit 2. Calculate the value-stream average product cost. If required, round your answer to the nearest cent. $ per unit Assuming reasonable stability in the consumption patterns of the products and product mix, assess how well the products are grouped based on similarity. The two value-stream products are similar