mba642exercise5-26

# mba642exercise5-26 - can divide total material handling...

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Exercise 5-26, 2 and 4 only Question: Precision Lens Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information. Mirrors Lenses Units produced 30 30 Material moves per product line 4 16 Direct-labor hours per unit 250 250 The total budgeted material-handling cost is \$90,000 Required: 2. Answer the same question as in requirement (1), but for lenses. (Under a costing system that allocates 90,000 / 60 = \$1,500 per lens Because each unit requires the same # of direct-labor hours per unit, the same amount of units are produced, you
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Unformatted text preview: can divide total material handling cost by total units produced for lenses and mirrors to come up with a per unit cost 4. Answer the same question as in requirement (3), but for lenses. (Under activity-based costing (ABC), the is the number of material moves. [90,000 / [(4+16) x16 ]] / 30 = 2,400 Divide total material handling cost by the total # of direct material moves, then multiple that total by the # of material moves for the lens product line and divide by the total units of lenses produced. overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount)? material-handling costs allocated to one lens would be what amount? The cost driver for the material-handling activity...
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## This note was uploaded on 11/13/2011 for the course MBA 642 taught by Professor Jamesstephens during the Summer '11 term at Bellevue.

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