Answer:
1. Product cost for model B-13
Various Manufacturing cost = Cost driver * Activity Rate
Materials handling = 180 parts x $2.40 = $432.00
Manufacturing Supervision = 7.50 machine hours x $14.80 = $111.00
Assembly = 180 parts * $3.30 = $594.00
Machine setup = 3 setups * $56.50 = $169.50
Inspection and testing = 1.50 inspection time * $45.50 = $68.25
Packaging = 0.75 packaging time * $19.50 = $14.63
Total Manufacturing cost =$432.00 + $111.00 + $594.00 + $169.50 + $68.25 + $14.63 = $1389.38
Particulars Amount$
Direct Materials 150.50
Manufacturing cost <u>1,389.38</u>
Total Product cost <u>1,539.88</u>
The product cost for model B-13 is $1,539.88
2. Product cost for model F-32
Various Manufacturing cost = Cost driver * Activity Rate
Materials handling = 110 parts * $2.40 = $264.00
Manufacturing Supervision hours = 6.20 machine hours * $14.80 = $91.76
Assembly = 110 parts * $3.30 = $363.00
Machine setup = 2 setups * $56.50 = $113.00
Inspection and testing = 1.25 inspection time * $45.50 = $56.88
Packaging = 0.50 packaging time * $19.50 = $9.75
Total Manufacturing cost = $264.00 + $91.76 + $363.00 + $113.00 + $56.88 + $9.75 = $898.39
Particulars Amount$
Direct Materials 95.90
Manufacturing cost <u>898.39</u>
Total Product cost <u>994.29</u>
Hence, the product cost for model F-32 is $994.29.
3. Particulars Amount$
Sales 1,690.00
Less: Product cost <u>1,539.88</u>
Product Margin <u>150.12</u>
Hence, the product margin for Model B-13 is $150.12
4. Particulars Amount$
Sales 922.00
Less: Product cost <u>994.29</u>
Product Margin <u>-72.29</u>
Hence, the product margin for Model F-32 is -$72.29
