Value-Stream Costing Objective

During the week of June 12, Harrison Manufacturing produced and shipped 17,000 units of its aluminum wheels: 3,600 units of Model A and 13,400 units of Model B. The following costs were incurred:

Materials Salaries/Wages Machining Other Total Cost

Order processing $19,000 $19,000

Production planning 185,400 185,400

Purchasing 24,300 24,300

Stamping $355,000 35,500 $37,600 $19,600 447,700

Welding 150,000 42,000 12,000 246,000 385,000

Cladding 11,000 11,000

Testing 9,000 9,000

Packaging and shipping 9,000 9,000

Invoicing 12,200 12,200

Total $890,000 $338,400 $79,600 $31,600 $1,339,600

Required:

1.Assume initially that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost.

$____ per unit

2.Calculate the unit cost for Models A and B.

Model A $____

Model B $____

3.What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B.

Model A $____

Model B $____

Calculate the total unit cost for Models A and B.

Model A $____

Model B $____