# Cost 11-16 - to products using the inferioir methods of...

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1 Ratios: Machine Assembly square feet 2/3 1/3 material moves 3/5 2/5 machine hours 4/5 1/5 direct overhead \$280,000.00 \$175,000.00 maintenance \$88,000.00 \$22,000.00 materials handeling \$54,000.00 \$36,000.00 building and grounds \$100,000.00 \$50,000.00 \$522,000.00 \$283,000.00 522000/80000= \$6.53 per machine hour 283000/20000= \$14.15 per direct labor hour Overhead per product: Unit cost Eaters- (6.53 x 1) + (14.15 x 0.25)= \$10.07 +12+4= 26.07 Edgers- (6.53 x 2) + (14.15 x 0.5)= \$20.14 45+30= 95.14 2 Unit Cost-JIT: Eaters- 425000/20000= \$21.25 Edgers- 2225500/30000= \$74.18 3 The JIT unit costs are more accurate because in JIT many overhead costs assigned

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Unformatted text preview: to products using the inferioir methods of either driver tracing or allocation are now directly attributable to products using the more accurate, direct tracing method. The Functional-based costing system assigns costs to departments then to products using unit-based drivers. 4 805000-599500= \$205,500 decrease This decrease in overhead costs can be explained through facets of JIT manufacturing such as manufacturing cells and their layouts, total quality control, and employee empowerm ent....
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Cost 11-16 - to products using the inferioir methods of...

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