Reference no: EM131019334
Problem 3
Braithwaite Company manufactures two types of kayaks, the Intrepid and Explorer. Previously, the company has allocated manufacturing support costs using a plant-wide rate based on direct labour hours. It has been suggested that the company consider assigning support costs to the equipment using activity-based costing. The following data has been collected:
|
Item
|
Intrepid
|
Explorer
|
|
Units produced and sold
|
50,000
|
20,000
|
|
Direct labour hours used
|
25,000
|
20,000
|
|
Direct labour cost
|
$75,000
|
$60,000
|
|
Number of times each unit is handled
|
3
|
5
|
|
Number of cuts per unit
|
2
|
6
|
|
Number of design changes (total)
|
5
|
10
|
|
Number of product setups (total)
|
30
|
40
|
The actual manufacturing support costs incurred were as follows:
|
Cost Pool
|
Related Costs
|
|
Handling
|
$ 500,000
|
|
Cutting
|
1,500,000
|
|
Design changes
|
600,000
|
|
Setups
|
20,000
|
|
Total
|
$2,620,000
|
The direct material cost for the Intrepid model is $500 per unit, and for the Explorer model, $700 per unit.
Required:
1. Determine the unit cost of each product using direct labour hours to allocate all manufacturing support costs.
2. Determine the unit cost of each product using activity-based costing.
3. Explain why the unit cost is different in requirements 1 and 2.
Problem 6
Whyte Trucks Inc. produces large, heavy duty trucks. It is attempting to reduce manufacturing costs. It polled customers with respect to product requirements and obtained the following information:
|
Category
|
Importance
|
|
Driver comfort
|
30
|
|
Fuel efficiency
|
50
|
|
Safety
|
20
|
Whyte identified the following target costs for various truck components:
|
Function
group
|
Target cost
|
|
Frame
|
$30,000
|
|
Engine
|
50,000
|
|
Body
|
40,000
|
|
Other
|
80,000
|
Whyte engineers produced the following quality function deployment matrix:
|
|
|
|
|
|
|
Function group
|
|
Categories
|
|
Frame
|
Engine
|
Body
|
Other
|
|
Driver comfort
|
|
.2
|
|
.2
|
.6
|
|
Fuel efficiency
|
|
|
.6
|
.3
|
.1
|
|
Safety
|
|
.3
|
.1
|
.2
|
.4
|
Required: Determine which function groups are candidates for cost reduction.
|
Calculate the income elasticity oflorena demand for golf
: In scenario D2, Lorena's income is $70,000 and the price of moviesrises to $11 each. 3 Quantity demanded PRICE ($)D1D2501510352515a) Using the data under D1 and D2, calculate the cross elasticity ofLorena's demand for golf at all two prices. Are m..
|
|
Explain the concept of the efficient market hypothesis
: What are the fundamental claims of behavioral critique of the Efficient Market Hypothesis (EMH)?
|
|
Assignment-nursing leadership health policy paper
: This assignment requires thought about a public policy that is needed or needs to be changed that relates to nursing, health care, or the public. Policy changes can occur by working with members of your legislature, and state or national nurses as..
|
|
Why is valuation a central piece in the finance profession
: How much control do you think you have over your own retirement savings? In other words, after all said in done in above, do you really think you can reasonably count on your retirement savings at the time of your retirement? Yes or no and explai..
|
|
Determine the unit cost of each product using activity-based
: Braithwaite Company manufactures two types of kayaks, the Intrepid and Explorer. Previously, the company has allocated manufacturing support costs using a plant-wide rate based on direct labour hours.
|
|
Describe the spread of war fever
: L.F. Richardson proposed a model to describe the spread of war fever. † His proposal: if y = f(t) is the percent of the population advocating war at time t, then the rate of change of f(t) at any time is proportional to the product of the percentage..
|
|
Compute the market value of the bounds
: How many bounds will the firm have to issue to receive the needed funds?
|
|
What is the probability of a type ii error
: A null hypothesis isp>0.65. To test this hypothesis, a sample of 400 is taken and alpha is set at 0.05. If the true proportion isp = 0.60, what is the probability of a type II error?
|
|
What does the main character want
: What are the distinguishing qualities and characteristics of the main character(s) - what does the main character want? Goals/ambitions/aspirations?
|