Lens Care Incorporated (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 Materials handling Allocation Base Number of parts per part Hours of machine time $ 14.86 per hour $ 3.60 per part $ 56.80 Number of parts Each setup Logged hours Logged hours per setup $ 45.80 per hour $ 19.80 per hour model for $3,125 and the F-32 model for $2,900. Manufacturing costs and activity usage for the two products are as follows: Manufacturing supervision Assembly Machine setup Inspection and testing Packaging LCI currently sells the B-13 Costing Rate $ 3.00 B-13 F-32 Direct materials $164.80 $ 75.84 Number of parts 166 126 Machine hours 8.20 4.26 1.40 0.80 3 Inspection time 2.30 Packaging time 1.20 Setups 4 The profit margin based on manufacturing cost for model B-13 is:
Lens Care Incorporated (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 Materials handling Allocation Base Number of parts per part Hours of machine time $ 14.86 per hour $ 3.60 per part $ 56.80 Number of parts Each setup Logged hours Logged hours per setup $ 45.80 per hour $ 19.80 per hour model for $3,125 and the F-32 model for $2,900. Manufacturing costs and activity usage for the two products are as follows: Manufacturing supervision Assembly Machine setup Inspection and testing Packaging LCI currently sells the B-13 Costing Rate $ 3.00 B-13 F-32 Direct materials $164.80 $ 75.84 Number of parts 166 126 Machine hours 8.20 4.26 1.40 0.80 3 Inspection time 2.30 Packaging time 1.20 Setups 4 The profit margin based on manufacturing cost for model B-13 is:
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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