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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