Question

Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.) Number of units produced Direct labor cost (@ $31 per DLH) Direct materials cost Product A 12,500 units 0.13 DLH per unit $ 2.00 per unit Product B 1,100 units 0.22 DLH per unit $ 2.50 per unit Activity Machine setup Materials handling Quality control inspections Overhead costs $ 33,532 62,000 83,700 $ 179,232 Required:

Answer 1

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A B C D E F 2. 1 Units Units 2 Number of units 12500 1100 3 4 Machine Setup 33532 5 Materials handling 62000 6 Quality control 83700 7 179232 8 Requirement 3: Requirement 3: Product A Product B 9 Machine setup 5 Setups 36 Setups 10 Number of parts required 14 part/unit 5 part/unit 11 Inspection hours required 50 hours 220 hours 12 13 Number of parts required 175000 parts 5500 parts 14 (Part/unit*unit) 15 16 Machine setup 17 Overhead costs 33532 817.8536585 per setup 18 Number of setups 41 19 20 Materials handling 21 Overhead costs 62000 0.343490305 per part 22 Number of parts 180500 23 24 Quality control 25 Overhead costs 83700 310 Per inspection hour 26 Number of inspections 270 27 Sheet104 Sheet105 Sheet106 Sheet107 Sheet108 Sheet109 Sheet110 Stats Ready

A B с D E F G H 27 28 29 30 Product A Overhead Assigned Machine setup Materials handling Quality control Total overhead costs assigned Total units produced Overhead cost per unit Activity Driver 5 Units 175000 parts 50 setups Activity rate 817.8536585 per setup 0.343490305 per part 310 Per inspection hour 31 32 Total Overhead Cost 4089.268293 60110.803321 15500 79700.07162 12500 6.376005729 33 34 35 36 37 38 39 Product B Overhead Assigned Machine setup Materials handling Quality control Total overhead costs assigned Total units produced Overhead cost per unit Activity Driver 36 Units 5500 parts 220 setups Activity rate 817.8536585 per setup 0.343490305 per part 310 Per inspection hour 40 41 Total Overhead Cost 29442.73171 1889.196676 68200 99531.928381 1100 90.48357126 42 43 44 45 46 47 48 Total manufacturing costs Direct Materials per unit Direct labor per unit Overhead per unit Total manufacturing costs per unit Product A Product B 2 2.5 4.03 6.82 6.376005729 90.48357126 12.40600573 99.803571261 49 50

A B E 51 52 Requirement 4: Profit (loss) per unit 53 Market Price 54 Manufacturing cost per unit 55 Profit (loss) per unit 56 Product A Product B 23.63 60 -12.40600573 -99.80357126 11.22399427 -39.80357126

For calculation ref:

D B с D E F 1 Units Units 12500 Number of units 1100 3 4 5 6 7 Machine Setup 33532 Materials handling 62000 Quality control 83700 =SUM(D4:06) Product A 5 Setups 14 part/unit 50 hours Product B 36 8 Requirement 3: Requirement 3: 9 Machine setup Number of parts required Inspection hours required 10 5 Setups part/unit hours 11 220 12 13 =C10*D2 parts =E10*E2 parts Number of parts required (Part/unit*unit) 14 15 16 17 Machine setup Overhead costs Number of setups =D4 =C17/C18 per setup 18 =C9+E9 19 20 21 Materials handling Overhead costs Number of parts =D5 =C21/C22 per part 22 =C13+E13 23 24 25 Quality control Overhead costs Number of inspections =D6 =C25/C26 Per inspection hour 26 = (C11+E11) 27 Sheet104 Sheet105 Sheet106 Sheet107 Sheet108 Sheet109 Sheet110 Stats Ready

A B с D E F G 27 28 29 Activity Driver Units Activity rate =E17 30 =C9 =D17 =D21 31 =C13 Product A Overhead Assigned Machine setup Materials handling Quality control Total overhead costs assigned Total units produced Overhead cost per unit parts setups =E21 =E25 1=C11 =D25 32 33 Total Overhead Cost =C30*E30 =C31*E31 =C32*E32 =SUM(G30:G32) =D2 =G33/G34 34 35 36 37 38 39 40 Product B Overhead Assigned Machine setup Materials handling Quality control Total overhead costs assigned Total units produced Overhead cost per unit =E9 =E13 =E11 Activity Driver Units parts setups =D17 =D21 =D25 Activity rate =E17 =E21 =E25 41 Total Overhead Cost =E39*C39 =E40*C40 =E41*041 =SUM(G39:G41) =E2 =G42/G43 42 43 44 45 46 Product B 2.5 47 48 Total manufacturing costs Product A Direct Materials per unit 2 Direct labor per unit 4.03 Overhead per unit 1 =G35 Total manufacturing costs per unit =SUM(C47:C49) 6.82 49 50 =G44 =SUM(D47:049)

A B C D 51 52 Requirement 4: Profit (loss) per unit 53 Market Price 54 Manufacturing cost per unit 55 Profit (loss) per unit 56 Product A 23.63 --C50 =SUM(C53:C54) Product B 60 =-D50 =SUM(D53:054) 57