Question
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
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 | ||||
Cell manufacturing | 2,380 | min. | 7,140 | min. | $ | 57,120 |
Engineering | 65 | hrs. | 260 | hrs. | 26,975 | |
Testing | 105 | hrs. | 294 | hrs. | 29,127 | |
Total | $ | 113,222 |
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 | $fill in the blank 1 per unit |
Model B | $fill in the blank 2 per unit |
2a. Calculate the value-stream average product cost. If required, round your answer to the nearest cent. $fill in the blank 3 per unit
2b. Assuming reasonable stability in the consumption patterns of the products and product mix, assess how well the products are grouped based on similarity.
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