Western Mechanical

Western Mechanical (WM) produces three products (Sequence, Forward, and Revolution) that are used in the heavy manufacturing industry. WM uses three activities

to produce these products:cuttingassembly, and finishing.In turn the three activities use four overhead resources: indirect labour, productionlabour, machine 1, and machine 2.Indirect labour workers are paid a salary of $55,000 per year. The indirect labourworkers work 242 days each year. The workday is 8 hours however each day indirectlabour workers aregiven a 15-minute break in the morning, a 15-minute break in theafternoon, and 30 minutes for lunch.The production labour workers are paid a salary of $80,000 per year. The productionworkers work 242 days each year. The workday is 8 hours however eachday productionlabour workers are given a15-minutebreak in the morning, a15-minutebreak in theafternoon, 15 minutes of quality control training, and 30 minutes for lunch.Machine 1 has an annual cost of $250,000 and a practical capacity of 2,400 hours.Machine 2 has an annual cost of $365,000 and a practical capacity of 2,900 hours.The following table identifies the hours of overhead resources used per hour of each activity.

Activities consumed

Resource Cutting hours Assembly Hours Finishing Hours

- indirect labour 4 5.1 6.2

-production labour 5.6 4.4 2.3

-machine 1 0.8 0.75 1.2

-machine 2 1.00 1.1 1.4

The following table shows the hours of each activity each product uses

Activity consumed

Product Cutitng Assembly finishing

Sequence 1 1.5 2.5

Forward 0.75 1.6 2.3

Revolution 1.7 3 1.7

Question 1

Compute the overhead cost of producing each activity. Show all calculations clearly in an appendix and summarize the costs in a table in the body of your report.

Question 2

Compute the overhead cost of producingeach product. Show all calculations clearly inan appendix and summarize the costs in a table in the body of your report.

Question 3

If planned production is Sequence150 units, Forward110 units, and Revolution180 units how many production workers and indirect workers will be required?Workers must be hired for the entire yearthat is no partial worker hiring is permitted.Show all calculations clearly in an appendix and summarize the costs in a table in thebody of your report.

Question 4

Ifplanned production is Sequence150 units forward110 units, and Revolution180 units how many hours of machine 1 and how many hours of machine 2 will berequired?Show all calculations clearly in an appendix and summarize the costs in atable in the body of your report.

Question 5

If planned production is Sequence150 units, Forward110 units, and Revolution180 units what is the total expected overhead cost?

Show all calculations clearly in an

appendix and summarize the costs in a table in

the body of your report.