During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its aluminum wheels: 3,000 units of Model A and 12,000 units of Model B. The following costs were incurred:

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, and comment on its accuracy.
2. Calculate the unit cost for Models A and B, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation.
3. What if Model A is responsible for 40 percent of the materials cost? Show how the unit cost would be adjusted for this condition.

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Salariesi MaterialsWages Machining Other Total Cost S 18,000 36,000 27,000 37,500 42,000 Order processing Production planning $ 18,000 36,000 27,000 466,500 246,000 75,000 10,500 9.000 12,000 S30,000 %900,000 Stamping Welding S375,000 150,000 75,000 1 S36,000 42,000 S18,000 12,000 Cladding 10,500 9,000 12,000 S600,000 S192,000 Packaging and shipping Invoicing $78,000