Value-Stream Costing Objective During the week of June 12, Harrison Manufacturin

Question

Value-Stream Costing Objective During the week of June 12, Harrison Manufacturing produced and shipped 16,400 units of its aluminum wheels: 3,600 units of Model A and 12,800 units of Model B. The following costs were incurred: Materials Salaries/ Wages Machining Other Total Cost Order processing $19,400 $19,400 Production planning 304,800 304,800 Purchasing 23,400 23,400 Stamping $380,000 38,000 $37,200 $19,200 474,400 Welding 160,000 20,000 16,000 12,000 208,000 Cladding 65,000 65,000 Testing 10,000 10,000 Packaging and shipping 10,000 10,000 Invoicing 14,200 14,200 Total $605,000 $439,800 $53,200 $31,200 $1,129,200 Required: Note: Round ALL interim calculations to two decimal places. Uses these values in subsequent computations.

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.

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 $

Explanation / Answer

2.

3.

1 Material wages Machining Other Total Order pRocessing 19400 19400 Production Planning 304800 304800 Purchasing 23400 23400 Stamping 380000 38000 37200 19200 474400 Welding 160000 20000 16000 12000 208000 Clading 65000 65000 Testing 10000 10000 Packaging shipping 10000 10000 Invoicing 14200 14200 Total Cost 605000 439800 53200 31200 1129200 Total Units 16400 Unit Cost (Total Cost/Units)         68.85

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