Cornerstone Exercise 15.2 (Algorithmic) Value-Stream Costing Objective

During the week of June 12, Harrison Manufacturing produced and shipped 16,200 units of its aluminum wheels: 3,400 units of Model A and 12,800 units of Model B. The following costs were incurred:

	Materials		Salaries/ Wages		Machining		Other		Total Cost
Order processing			$19,400						$19,400
Production planning			304,800						304,800
Purchasing			23,400						23,400
Stamping	$380,000		38,000		$36,400		$19,200		473,600
Welding	150,000		18,750		14,000		12,000		194,750
Cladding	65,000								65,000
Testing			10,000						10,000
Packaging and shipping			10,000						10,000
Invoicing			14,200						14,200
Total	$595,000		$438,550		$50,400		$31,200		$1,115,150

Required:

Note: Round ALL interim calculations to two decimal places. Uses these values in subsequent computations.

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. $ per unit

2. Calculate the unit cost for Models A and B.

	Unit Cost
Model A	$
Model B	$

3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B.

	Unit Cost
Model A	$
Model B	$

Calculate the total unit cost for Models A and B.

	Unit Cost
Model A	$
Model B	$

Cornerstone Exercise 15.2 (Algorithmic) Value-Stream Costing Objective During the week of June 12, Harrison Manufacturing produced and shipped 16,200 units of its aluminum wheels: 3,400 units of Model A and 12,800 units of Model B. The following costs were incurred Materials Salaries Machining Other Total Cost Wages Order processing Production planning Purchasing Stamping Welding Cladding Testing Packaging and shipping Invoicing $19,400 304,800 23,400 473,600 194,750 65,000 10,000 10,000 14,200 1,115,150 $19,400 304,800 23,400 38,000 18,750 $380,000 150,000 65,000 $36,400 14,000 $19,200 12,000 10,000 10,000 14,200 $438,550 Total Required: Note: Round ALL interim calculations to two decimal places. Uses these values in subsequent computations. 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. $595,000 $50,400 $31,200 per unit 2. Calculate the unit cost for Models A and B. Unit Cost Model A Model B 3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B Unit Cost Model A Model B Calculate the total unit cost for Models A and B. Unit Cost Model A Model B