Vishal Company has implemented lean manufacturing systems. One of the value streams of the company manufactures three

Question:

Vishal Company has implemented lean manufacturing systems. One of the value streams of the company manufactures three products: A, B, and C. Each product goes through three cells, each of which has a team of people and machines. The operational sequence of the three cells is as follows:

Total conversion cost (excluding materials) of the value stream is $2,000 per production hour. The cost of materials for each product is $350.

Required:
1. Under the traditional costing method, what is the unit cost for each product?
2. Calculate the unit cost of each product using the features and characteristics costing approach.
3. Compare the unit costs obtained from these twoapproaches.