Reference no: EM1347005
The current cost accounting system allocates manufacturing support costs to to the the two products on the basis of direct labor hours. The company has estimated that this year it will incur $1M in manufacturing support costs and will produce 5,000 units of the deluxe model and 40,000 units of the regular model. The deluxe model requires 2 hours of direct labor, and the regular model requires 1 hour.
Item Deluxe Regular
Direct materials cost $45 $30
Direct Labor cost 20 10
Selling Price 140 80
a) Compute the manufacturing support cost driver rate for this year.
b) Determine the cost to maufacture one unit of each model.
c) The company has decided to trace manufacturing support costs traceable to the four activities this year.
Cost Driver Units Demanded
Activity Cost Driver Cost Total Deluxe Regular
Purchase Orders No. of orders $180,000 600 200 400
Quality Control No. of Inspections 250,000 2000 1000 1000
Product Setups Number of setups 220,000 200 100 100
Machine maintenance Machine hours 350,000 35,000 20,000 15,000
Compute the total cost to manufacture one unit of each model.
d) Compare the manufacturing activity resources demanded per unit of the regualer model and per unit of the deluxw model. Why did the old costing system undercost the deluxe model?
e) Is the deluxe model as profitable as the company thinks it is under the old costing system? Explain.
f) What should the Manhattan Company do to improve its profitability? Consider pricing and product-level changes among your suggest. Who should be involved in implementing your recommendations?
|
Finding the primary competitor
: Suppose your corporation produces a quality line of home kitchen appliances, dishwashers, refrigerators, stoves, and so 4th, & you are highly competitive with corporations such Frigidaire, KitchenAid, Whirlpool, GE, LG, and others.
|
|
Influence the effectiveness of pay system
: Describe how employee communications and participation influence the effectiveness of the pay system and provide some examples of a current organization.
|
|
What is the coronal density in particles
: A long solenoid has 80 turns/cm and carries current i. An electron moves within the solenoid in the circle of radius 3.10 cm perpendicular to the solenoid axis. The speed of an electron is 0.0330c (c = speed of light). Find current i.
|
|
Explaining valid host addresses of wan links
: Start with LAN on RTA and proceed clockwise. Determine the number that how many total valid host addresses will be wasted on WAN links?
|
|
Traditional costing and activity-based costing
: What should the Manhattan Company do to improve its profitability? Consider pricing and product-level changes among your suggest. Who should be involved in implementing your recommendations?
|
|
Find out the speed of light in calcite
: A man weighing 730 and a woman weighing 410 have the same momentum. What is the ratio of the man's kinetic energy to that of the woman.
|
|
Elucidate what will happen if oil prices remain in range
: As per to Global Insight, a Massachusetts economics consultancy, elucidate what will happen if oil prices remain in the range of $65 to $70 per barrel for a couple of more months.
|
|
Activity-based costing: hampstead company
: Hampstead company's order entry department has 20 order entry operators. The cost associated with these 20 operators (salaries, fringe benefits, and supervision, as well as occupancy and equipment costs) is $873,600 per year.
|
|
Improving communication and indepedent distribution channels
: List and explain the three possible relationships among perceived value, price and cost ignoring the competition for the present. If you consider the competition, then what is the perceived relationship among value, price and cost
|