Value-Stream Average Costing, ABC, DBC A value stream has three activities and two products. The units produced and shipped per week are 50 of the limited model (Model K), characterized by special additional features, and 150 of the regular model (Model R), with only basic features. The conversion cost resource consumption patterns are shown as follows: Model K Model R Costs of Value -Stream Activities Cell manufacturing 2,700 minutes 2,100 minutes $19,200 Engineering Testing 65 hours 15 hours 3,400 25 hours 55 hours 3,000 $25,600 Total Required: 1. Calculate the ABC product cost (conversion cost) for Models K and R. Round dollars to 2 decimal places. Model K $ Model R $ X per unit X per unit 2. Calculate the value-stream average product cost (conversion cost). Assuming reasonable stability in the consumption patterns of the products and product mix, assess how well the products are grouped, based on similarity. The average cost is markedly different from the ABC costs, which suggests significant very different in terms of the demands they place on value-stream resources heterogeneity. The products may be similar in the sense that they use the same sequence of production operations but 3. Calculate the cycle time for each product by dividing the total hours used for each product by the units produced of each product. Now calculate the DBC cost for each product. Round the answers to nearest cent. Model K $ EA> 10 Model R $ DBC approximates ABC costs quite well and has the simplicity needed for a lean manufacturing environment. Thus, whenever there are heterogeneous approach than average costing and a viable alternative to features and characteristics costing. products in a value stream, DBC appears to be a more desirable 419. 668. Feedback