Question

Value-Stream Costing Objective

During the week of June 12, Harrison Manufacturing produced and shipped 15,400 units of its aluminum wheels: 3,000 units of Model A and 12,400 units of Model B. The following costs were incurred:

	Materials		Salaries/ Wages		Machining		Other		Total Cost
Order processing			$19,000						$19,000
Production planning			243,000						243,000
Purchasing			22,500						22,500
Stamping	$355,000		35,500		$36,600		$20,000		447,100
Welding	160,000		42,000		42,000		12,000		256,000
Cladding	265,000								265,000
Testing			10,500						10,500
Packaging and shipping			9,000						9,000
Invoicing			12,600						12,600
Total	$780,000		$394,100		$78,600		$32,000		$1,284,700

Required:

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. Round your answer to the nearest dollar amount.
$ per unit

2. Calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount.

	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. Round your answers to the nearest dollar amount.

	Unit Cost
Model A	$
Model B	$

Calculate the total unit cost for Models A and B. Round your interim calculations and final answers to the nearest dollar amount.

	Unit Cost
Model A	$
Model B	$

Answer 1