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##### ACCT - DynaGolf Production Activities

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Question;DynaGolf Production Activities SummaryDrivers Wedges PuttersProduction (in units) 10,000 15,000 5,000Number of production runs 1 3 10DynaGolf Shipping Department Activities SummaryDrivers Wedges PuttersShipments (in units) 10,000 15,000 5,000Number of shipments 1 5 20Labor includes the machinists? time doing setup labor, which is required before the production process can begin, and the machine operators? time during the production run itself. Both machinists and machine operators cost \$20 per hour. The production run also consumes machine hours. The raw materials, labor, and machine hours used in the process are summarized in the following table:DynaGolf Machining Department Activities SummaryDrivers Wedges PuttersRaw materialsComponents required per unit 5 6 10Cost per component \$4 \$5 \$1Total raw materials cost per unit \$20 \$30 \$10Labor cost (at \$20 per hour)Setup labor (per production run) 10 hrs 10 hrs 11 hrsRun labor (per club head) 1/2 hr 1/3 hr 1/4 hrMachine hours (per club head) 1/4 hr 1/3 hr 1/2 hrThe Machining department has a total budget of \$700,000 in a typical month, which includes depreciation and maintenance on the machines and the cost of the electricity to run them. This, and other totals for departmental overhead, appear in the table below:DynaGolf Departmental Overhead Totals (in \$000)Receiving department 300Engineering department 500Machining department 700Packing department 200Setup department 3Total manufacturing overhead 1,703QUESTIONS: USING THE DATA PROVIDED-1. Calculate the per-unit costs for each product using the current system.2. Calculate the per-unit costs for each product using Phil Meyers? proposed system.3. Calculate the per-unit costs for each product using activity-based costing.4. Using the results of your calculations, assume you are the consultant that Joe Bell should have hired instead of talking with his board member, Steve Barber. Prepare a brief report that provides a comprehensive analysis of the problems DynaGolf is facing here. Make recommendations that will justify your outrageous consulting fee. Specifically, recommend a cost system (with a very clear rationale for adopting it) and make good suggestions for operational improvements that should be obvious after you think about the case and construct the three cost systems above.

Paper#43318 | Written in 18-Jul-2015

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