TBM case Study Example | Topics and Well Written Essays - 1000 words

TBM - Case Study Exampleence we are able to determine do production per unit as follows mathematical product (Valves) score Cost Manufacturing overhead (4.39% X 4) 17.548 Materials $16 Direct labor based on run labor (16% X 0.25) 4 get standard comprise $38 Pumps Manufacturing overhead (4.39% X 8) 35.096 Materials $20 Direct labor based on run labor (16 X 0.50) 8 follow standard represent $63 time period Controllers Direct labor based on run labor (16 X 0.40) 6.4 Materials $22 Manufacturing overhead (4.39% X 6.4) 28.0768 Total standard woo $56 2. No change Contribution margin = Sales - variable approach Since Mary Ford stipulated that, In our situation, the only short-run variable cost is direct material then the material cost can be considered to be the variable cost 3. This is using Mary Fords comments on a more modern view that uses material related overhead as well as additional overhead allocations. All products should have Per unit Costs calculated and show all overhead computations hit cost = Materials handling + receiving cost MOC= $ (20,000+ 200,000) = $220000 Overhead rate based on materials cost= $ 220,000/458,000 Overhead rate based on materials cost= 0.480 (48%) Other overhead costs include Engineering = $100,000 Machine depreciation = $ 270,000 Main = $30,000 Packing and shipping = $60,000 Total overhead = $ 460,000 Overhead rate based on machine hours= ($460,000/ 10,800 hours) One machine =$ 42.59/hr Setup labor cost= ( repulse hour x Set-up Labor)/total units = ($16 X8)/7500 = $0.02 Pumps = ($16 X 8)/12,500 = $0.01 Flow Controllers= ($16 X12)/4000 = $0.048 As a result, the product costs per unit is as shown in the table below Product Explanation Cost Valves Direct labor (16 X 0.25) 4 Setup labor $0.02 Materials $16 Other overhead ($42.59 X 0.5) 21.30 Materials overhead (0.480 X 16) $7.68 Total cost 49.00 Pumps Setup labor 0.01 Materials overhead (0.480 X 20) 9.6 Other overhead ($42.59 X 0.5) 21.30 Direct labor ( 16X 0.50) 8 Materials $20 Total cost 58.91 Flow Controllers Direct labor (16 X 0.40) 6.4 Materials overhead (0.480 X 22) 10.56 Other overhead ($42.59 X 0.2) 8.52 Materials $22 Setup labor (439% X 6.4) = 0.048 Total cost $48 4. ABC method show Per Unit and Total costs for all three products 5. No change 6. Prepare table that compares the results for the 3 products. You should show the well-worn Cost, Gross Margin, and Gross Margin percentage-- Per Unit for each product. Describe which system you favor and briefly explain your reasoning. You will be doing a more arrant(a) analysis of your recommendations in Question 8 PUMPS Activity Rate Activity ABC Cost Materials 20 12,500 250,000 Labor 8 12,500 100,000 Overhead Setup Labor 0.05 640 Receiving 0.3 3,800 Material Handling 3.04 38,000 Pack/Ship 1.11 13,800 Engineering 2.40 30,000 Maintenance 1.39 17,400 Machine Deprec 12.5 156,250 Total Overhead 20.79 259,890 Total Cost $48.79 $609,890.00 FLOW comptroller FLOW CONTROLLER Acti vity Rate Act