Value-Stream Costing Objective Cornerstone Exercise 15.2 During the week of June
ID: 2513097 • Letter: V
Question
Value-Stream Costing Objective Cornerstone Exercise 15.2 During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its Required LECTIVE 1. Calc STONE 15.2aluminum wheels: 3,000 units of Model A and 12,000 units of Model B. The following costs 2. Cale char 3. Wh att me were incurred: Salaries/ Materials Wages Machining Other Total Cost 18,000 36,000 27,000 18,000 Order processing Production planning Purchasing Stamping Welding Cladding Testing 36,000 27,000 S375,000 37,500 36,000 $18,000 466,500 EXI 246,000 75,000 42,000 12,000 150,000 42,000 75,000 10,500 Exer Heli 10,500 9,000 12,000 $30,000 $900,000 Packaging and shipping Invoicing 9,000 12,000 600,000 $192,000 Totals $78,000 Required: Pro Mo 1. Assume initially that the value-stream costs and total units shipped apply only to one model 2. Calculate the unit cost for Models A and B, and comment on its accuracy. Explain the ra- 3. (a single-product value stream). Calculate the unit cost, and comment on its accuracy tionale for using units shipped instead of units produced in the calculation. Whatif Model A is responsible for 40 percent of the materials cost? Show how the unit cost would be adiusted for this conditionExplanation / Answer
below is the answer.
1. if only one product is manufactured considering single value stream then unit shall be the total cost incurred to produce 15000 Units. hence per unit cost will be 900,000 divided by 15000 units.
900,000/15000=60.
comment:- as we have assumed production to be single stream it can not be ascertain that how much cost is actually spend on each product.
2 Total cost for producing 15000 units is 900,000 . Ratio of model "A " to model "B" is 3:12 as 3000 of produt "A" and 12000 of Product "B" is sold.
hence total cost can be divided as 180000 to total units of "a" and 720000 to "B" calculated as
total cost/sum of ratio*ratio part =900000/15*3 and 900000/15*12
hence per unit cost for "A" is 180000 divided by produts of "A"
hence 180000/3000=60
for "B" it is 720000/15000=60
we have used product shipped instead of produced units as some of the units produced may not be suitable to ship.hence their cost be apportionated other usable goods.
3.total cost less material cost as now we have to distribute this material cost as 40% and 60%
so 900000-600000=300000
cost other than materil is 300000 hence per unit cost is 300000/15000=20
material cost is 600000 *60/100 and 600000*40/100
=360000 for b and 240000 for A
per unit cost for A is 240000/3000=80
total per unit cost for A if 80+60==140
for B it is 360000/12000=30
hence 30+60=90..
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