Effective Machine Hour Rate 8000 2 Effective Burden Rate Per Direct Labor 20

# Effective machine hour rate 8000 2 effective burden

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Effective Machine-Hour Rate = \$80.00 2- Effective Burden Rate Per Direct Labor \$ = 20% Product cost = Direct Labor \$ + (Direct Labor \$ * burden rate) + (Total machine hours *Machine-Hour Rate) ICA = 917 + (917*20%)+ (18.5*80) = 2580.40 \$ ICB =2051+(2051*20%)+ (40*80) = 5661.20 \$ CAPACITOR =1094+(1094*20%)+ (7.5*80) = 1912.80 \$ AMPLIFIER =525+(525*20%)+ (5*80) = 1030 \$ DIODE =519 +(519*20%)+ (12*80) = 1582.80 \$ Five Products total cost =\$ 12767.20
c) The system proposed by the consultant: The three-burden-pool : 1- Effective Burden Rate Per Direct Labor \$ = 20% Effective Machine-Hour Rate: 2- Main Test Room = Burden \$ / Machine HRS = 2103116/33201 = 63.34 Effective Rate = 63\$ 3- Mechanical Test Room : 1926263/17103 = 112.63 Effective Rate = 113\$ Product cost = Direct Labor \$ + (Direct Labor \$ * burden rate) + (Main Test room machine hours* Main test Machine-Hour Rate) + (Mechanical Test room machine hours* Mechanical test Machine-Hour Rate) ICA = 917 + (917*20%)+ (8.5*63) + (10*113) = 2765.90 \$ ICB =2051+(2051*20%)+ (14*63) + (26*113) = 6281.20 \$ CAPACITOR =1094+(1094*20%)+(3*63) + (4.5*113) = 2010.30 \$ AMPLIFIER =525+(525*20%)+(4*63) + (1*113) = 995.00 \$ DIODE =519 +(519*20%)+(7*63) + (5*113) = 1628.80 \$ Five Products total cost =\$ 13681.20
With New machine : a) The existing system: One burden Pool : Effective Burden Rate= Total burden after adding cost of new machine / Total direct labor \$ = 4713982+250000/ 3260015 = 1.52 *100 = 152% Product cost = Direct Labor \$ + (Direct Labor \$ * burden rate) ICA = 917 + (917*152%) = 2310.84 \$ ICB =2051+(2051*152%) = 5168.52 \$

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• Fall '13

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