Management has decided to reduce direct material and ordering costs by purchasin
ID: 2410324 • Letter: M
Question
Management has decided to reduce direct material and ordering costs by purchasing sub-assembled components and not individual parts. you must do the following.
Requirements:
Using the Revised Category Costs tab, make the following changes under " Changes" Category. Other categories' costs remain same.
- Reduce direct labor rate from $30.00 to $28.00 per unit
- Reduce direct labor quantity from 3.00 to 2.65 hours per unit
- Reduce receiving and shipping ordering quantity from 100 to 90 units.
- Reduce testing and inspection from $2.00 to $1.75 per unit
- Reduce rework costs from $20 to $18 per unit
- Compute total costs for each category
- Complete Revised Cost Information tab
- Calculate total costs
- Calculate cost per unit for each category, round to two decimal points
Show all calculations within the cells. This means that you must use formulas and links so that your thought process can be examined. You must also include a detailed explanation of each journal entry that you make or do not make on each date to convey your thought process.
Current Changes Manufacturing costs Information for 100,000 units Revised Manufacturing costs Information for 100,000 units Cost Category Cost Driver Cost Driver Qty Budget units per cost driver Budget Total Qty Budgeted cost per unit Budget cost driver QTY Budget units per cost driver Budget Total Qty Budgeted Cost per unit of Cost Driver Revised Total Direct Material Number of kits 1 100,000 100,000 180 ????? ????? ????? ????? ????? Direct Labor Direct Labor hours 3 100,000 300,000 30 ????? ????? ????? ????? ????? Direct Machine Machine-Hours 0 0 150,000 25 ????? ????? ????? ????? ????? Ordering and Receiving Number of orders 100 100 10,000 40 ????? ????? ????? ????? ????? Test and inspection Testing hours 15 100,000 1,500,000 2 ????? ????? ????? ????? ????? Rework Rework 2 5,000 10,000 20 ????? ????? ????? ????? ?????Explanation / Answer
Cost Category Budget cost driver QTY Budget units per cost driver Budget total quantity Budgeted cost per unit of cost driver Revised Total (A) (B) (C) (D) (E) (A x B) (C x E) Direct Material 1 100000 100000 180 18000000 Direct Labor 2.65 100000 265000 30 7950000 Direct machine 0 0 150000 25 3750000 Orderign and Receiving 90 100 9000 40 360000 Test and inspection 15 100000 1500000 1.75 2625000 Rework 2 5000 10000 18 180000 Total Cost 32865000 Revised manufacturing cost for 100,000 units Cost per unit Direct Material 18000000 180.00 Direct Labor 7950000 79.50 Direct machine 3750000 37.50 Orderign and Receiving 360000 3.60 Test and inspection 2625000 26.25 Rework 180000 1.80 Total Cost 32865000 328.65
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.