34PGA_1 The Alright Manufacturing Compan... [FREE SOLUTION]

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Chapter 19: 34PGA_1 (page 1077)

The Alright Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in smartphones. Consider the following data regarding component T24 (amounts are per unit):
Direct materials cost $ 80.00
Direct labor cost 20.00
Activity-based costs allocated ?
Total manufacturing product cost ?
The activities required to build the component follow:
Activity Allocation Base Cost Allocated to
Each Unit
Start station Number of raw component chassis 4 * $ 1.50 = $ 6.00
Dip insertion Number of dip insertions ? * 0.30 = 9.60
Manual insertion Number of manual insertions 10 * 0.50 = ?
Wave solder Number of components soldered 4 * 1.90 = 7.60
Backload Number of backload insertions 7 * ? = 4.20
Test Number of testing hours 0.43 * 90.00 = ?
Defect analysis Number of defect analysis hours 0.15 * ?= 12.00
Total activity-based costs $ ?
Requirements
1. Complete the missing items for the two tables.

Short Answer

Expert verified

Activity based cost allocated:$83.1

Total manufacturing product cost:$183.1

No. of dip insertion:32

Total Manual insertion cost:$5

Backload unit cost:$0.6

Total test cost:$38.7

Defect analysis unit cost:$8

Step by step solution

Computation of missing figures for activity table

$\begin{matrix} N u m b e r o f d i p i n s e r t i o n = \frac{T o t a l D i p i n s e r t i o n c o s t}{U n i t C o s t} \\ = \frac{$ 9.60}{$ 0.30} \\ = 32 \end{matrix}$

\begin{matrix} T o t a l c o s t o f m a n u a l i n s e r t i o n = N o . o f m a n u a l i n s e r t i o n 脳 U n i t C o s t \\ = 10 脳 $ 0.50 \\ = $ 5 \end{matrix}

\begin{matrix} U n i t c o s t f o r b a c k l o a d = \frac{T o t a l c o s t}{N o . o f b a c k l o a d i n s e r t i o n} \\ = \frac{$ 4.2}{7} \\ = $ 0.6 \end{matrix}

\begin{matrix} T o t a l t e s t c o s t = N o . o f t e s t i n g h o u r s 脳 U n i t C o s t \\ = 0.43 脳 $ 90 \\ = $ 38.7 \end{matrix}

\begin{matrix} U n i t c o s t f o r d e f e c t a n a l y s i s = \frac{T o t a l c o s t}{N o . o f a n a l y s i s h o u r} \\ = \frac{$ 12}{0.15} \\ = $ 80 \end{matrix}

Computation of missing figure for component T24

$\begin{matrix} A c t i v i t y b a s e d c o s t a l l o c a t e d = S t a r t s t a t i o n c o s t + D i p i n s e r t i o n c o s t + M a n u a l i n s e r t i o n c o s t + W a v e s o l d e r c o s t + B a c k l o a d c o s t + T e a s t c o s t + D e f e c t a n a l y s i s c o s t \\ = $ 6 + $ 9.6 + $ 5 + $ 7.6 + $ 4.2 + $ 38.7 + $ 12 \\ = $ 83.1 \end{matrix} \begin{matrix} T o t a l m a n u f a c t u r i n g p r o d u c t c o s t = A c t i v i t y b a s e d c o s t a l l o c a t e d + D i r e c t M a t e r i a l c o s t + D i r e c t l a b o r c o s t \\ = $ 83.1 + $ 80 + $ 20 \\ = $ 183.1 \end{matrix}$

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Activity	Predicted Reduction in Activity Units	Predetermined Overhead Allocation Rate per unit

Inspection of incoming raw materials	395	\( 44
Inspection of finished goods	395	26
Number of defective units discovered in-house	1,500	54
Number of defective units discovered by customers	275	73
Lost profits due to dissatisfied customers	100	103

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Short Answer

Step by step solution

Computation of missing figures for activity table

Computation of missing figure for component T24

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