Lens Care Inc. (LCI) manufactures specialized equipment for
polishing optical lenses. There are two models - one mainly used
for fine eyewear (F-32) and another for lenses used in binoculars,
cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated using
activity-based costing, using the following manufacturing cost
pools:
Cost Pools | Allocation Base | Costing Rate | ||
Materials handling | Number of parts | $ | 4.10 | per part |
Manufacturing supervision | Hours of machine time | $ | 14.97 | per hour |
Assembly | Number of parts | $ | 4.15 | per part |
Machine setup | Each setup | $ | 57.35 | per setup |
Inspection and testing | Logged hours | $ | 46.35 | per hour |
Packaging | Logged hours | $ | 20.35 | per hour |
LCI currently sells the B-13 model for $5,600 and the F-32 model for $5,980. Manufacturing costs and activity usage for the two products are as follows:
B-13 | F-32 | ||||||
Direct materials | $ | 165.35 | $ | 76.28 | |||
Number of parts | 177 | 137 | |||||
Machine hours | 8.75 | 4.37 | |||||
Inspection time | 3.40 | 2.50 | |||||
Packaging time | 1.75 | 1.35 | |||||
Setups | 2 | 1 | |||||
The profit margin based on manufacturing cost for model F-32 is:
F-32 | ||
Selling price | 5980.00 | |
Less: | ||
Direct materials | 76.28 | |
Materials handling | 561.70 | =137*4.10 |
Manufacturing supervision | 65.42 | =4.37*14.97 |
Assembly | 568.55 | =137*4.15 |
Machine setup | 57.35 | =57.35*1 |
Inspection and testing | 115.88 | =46.35*2.50 |
Packaging | 27.47 | =20.35*1.35 |
Total costs | 1472.65 | |
Profit margin for model F-32 | 4507.35 |
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models -...
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 4.10 per part Manufacturing supervision Hours of machine time $ 14.97 per hour Assembly Number of...
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $2.40 per part Manufacturing supervision Hours of machine time $14.80 per hour Assembly Number of parts $3.30...
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13) The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate $ 2.40 per part $14.80 per hour $ 3.30 per part $56.50 per setup $ 45.50 per hour $ 19.5e per hour...
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 3.20 per part Manufacturing supervision Hours of machine time $ 14.88 per hour Assembly Number of...
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models one mainly used for fine eyewear (F-32) and a equipment (B-13) The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools Cost Pools Materials handling Manufacturing supervision Assembly Machine setup Inspection and testing Packaging Allocation Base Number of parts Hours of machine t Number of parts Each setup Logged hours Logged hours Costing Rate $ 4.ee per part...
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Materials handling Manufacturing supervision Assembly Machine setup Inspection and testing Packaging Allocation Base Number of parts Hours of machine time Number of parts Each setup Logged hours Logged hours Costing Rate $ 4.20 per part $14.98 per...
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models one mainly used for fine eyewear (F32) and anot equipment (8-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools Cost Pools Materials handling Manufacturing supervision Assembly Machine setup Inspection and testing Packaging Allocation Base Number of parts Hours of machine time Number of parts Each setup Logged hours Logged hours Costing Rate $ 3.60 per part...
Saved Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models- one mainly used for fine eyewear (F-32) and another fom equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools Cost Pools Materials handling Allocation Base Costing Rate $ 4.20 per part Manufacturing supervision Assembly Machine setup Inspection and testing Packaging Number of parts Hours of machine tine Number of parts Each setup $14.98 per...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25) principally used for fine eyewear and the other (A–10) for lenses used in binoculars, cameras, and similar equipment. The following table shows the manufacturing cost of each unit is calculated, using activity-based costing, for these manufacturing cost pools. Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 3.75 per part Manufacturing supervision Hours of machine time $ 24.50 per hour Assembly...
13-4. Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25) principally used for fine eyewear and the other (A–10) for lenses used in binoculars, cameras, and similar equipment. The following table shows the manufacturing cost of each unit is calculated, using activity-based costing, for these manufacturing cost pools. Cost Pools Allocation Base Costing Rate Materials handling Number of parts $3.75 per part Manufacturing supervision Hours of machine time $24.50 per hour Assembly Number...