Question

Value-Stream Costing Objective

During the week of June 12, Harrison Manufacturing produced and shipped 16,400 units of its aluminum wheels: 4,000 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			$19,600						$19,600
Production planning			236,400						236,400
Purchasing			23,400						23,400
Stamping	$380,000		38,000		$37,000		$20,000		475,000
Welding	160,000		42,000		42,000		12,000		256,000
Cladding	415,000								415,000
Testing			10,000						10,000
Packaging and shipping			10,000						10,000
Invoicing			12,400						12,400
Total	$955,000		$391,800		$79,000		$32,000		$1,457,800

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