Value-Stream Costing Objective

During the week of June 12, Harrison Manufacturing produced and shipped 17,000 units of its aluminum wheels: 4,000 units of Model A and 13,000 units of Model B. The following costs were incurred:

Materials		Salaries/ Wages		Machining		Other		Total Cost
Order processing			$18,600						$18,600
Production planning			357,000						357,000
Purchasing			24,300						24,300
Stamping	$375,000		37,500		$37,400		$18,200		468,100
Welding	140,000		40,000		12,000		232,000		285,000
Cladding	11,000								11,000
Testing			9,000						9,000
Packaging and shipping			9,000						9,000
Invoicing			14,000						14,000
Total	$800,000		$511,400		$77,400		$30,200		$1,419,000

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.

	Unit Cost
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.

	Unit Cost
Model A	$
Model B	$

Calculate the total unit cost for Models A and B.

	Unit Cost
Model A	$
Model B	$