Cornerstone Exercise 15.2 (Algorithmic) Value-Stream Costing Objective

During the week of June 12, Harrison Manufacturing produced and shipped 18,400 units of its aluminum wheels: 4,800 units of Model A and 13,600 units of Model B. The following costs were incurred:

	Materials		Salaries/ Wages		Machining		Other		Total Cost
Order processing			$19,800						$19,800
Production planning			249,600						249,600
Purchasing			26,100						26,100
Stamping	$365,000		36,500		$36,000		$20,000		457,500
Welding	150,000		41,000		12,000		244,000		530,000
Cladding	11,000								11,000
Testing			9,000						9,000
Packaging and shipping			9,000						9,000
Invoicing			12,200						12,200
Total	$1,045,000		$405,200		$77,000		$32,000		$1,559,200

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. $ 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	$