Question

Krylon Company purchases eight special tools annually from CO., Inc. The price of these tools has increased each year, reaching $230,000 per unit last year. Because the purchase price has increased significantly, Krylon management has asked for a cost estimate to produce the tools in its own facilities. A team of employees from the engineering, manufacturing, and accounting departments has prepared a report for management that includes the following estimate to produce the first unit. Additional production employees will be hired to manufacture the tools. However, no additional equipment or space will be needed. The report states that total incremental costs for the first unit are estimated to be $146,000, as shown here: $ 53,000 Materials Direct labor, consisting entirely of hourly production workers (varies with production volume) 93,000 Overhead and administrative costs are not affected by producing this tool. The current purchase price is $230,000 per unit, so the report recommends that Krylon continue to purchase the product from CO., Inc.

Answer 1

Book1 - Microsoft Excel (Product Activation Failed) - 2 X Formulas Data Review View - x = = = r General Η File Home Insert Page Layout % Cut Calibri Ea Copy Paste Format Painter B I U - Clipboard Font K1 - fx I A B C D 11 - AA A Wrap Text Merge & Center - $ -% . Σ AutoSum Α Σ AutoSum Fill Sort & 2 Clear Filter Editing Formatting as Table Styles Styles Find & Select Alignment Number Cells E F G H I J K L M N O P Q R S T U V W X Y 2 The total average cost per unit using 80% learing curve is calculated below: Average Units Cumulative Labour Material Total Produced Learning Learning Total Labour cost per Cost per Average cost (x) Factor(Y) Factor Cost unit unit per unit 1.00 1.00 93,000 93,000 53,000 146,000 2 0 .80 1.80 167,400 83,700 53,000 136,700 3 0 .70 2.50 232,500 77,500 53,000 130,500 0.64 3.14 292,020 73,005 53,000 126,005 0.60 3.74 347,820 69,564 53,000 122,564 6 0.56 4.30 399,900 66,650 53,000 119,650 7 0 .53 4.83 449,190 64,170 53,000 117,170 8 0 .51 | 5.34496,620 62,078 53,000 115,078 The average cost per unit would be 115,078 Following Formulas are used to create the above worksheet:- Average Units Cumulative Labour Material Total Produced Learning Learning Total Labour cost per Cost per Average cost (x) Factor(Y) Factor Cost unit unit per unit 1 =11^0.3219) =E15 =93000-F15 =G15/D15 53,000 =115+H15 2 =1/240.3219) =E16+F15 =93000*F16 =G16/D16 53,000 =116+H16 31=1(340.3219) =E17+F16 =93000*F17=G17/D17| 53,000 =117+H17 41=1/440.3219=E18+F17 =93000*F18 =G18/D18 53,000 =118+H18 5=1(5^0.3219)=E19+F18 =93000*F19 =G19/D191 53,000 =119+H19 6 =1(6~0.3219) =E20+F19 =93000-F20/=G20/D20 53,000 = 120+H20 71=1710.3219)=E21+F20 =93000-F21 =G21/D21 53,000 =121+H21 8=1(840.3219=E22+F21 =93000*F22 =G22/D221 53,000 =122+H22 26 KIM Ready Sheet2 Sheet3 Sheet1 Scroll Lock BO: 80% - 04 _ + ENG O 1:29 PM @ e o of 9 Type here to search . . IN 2/20/2020 2020