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3. (TCO 8) Bones Company manufactures two products (X and Z).;Overhead costs have been divided into three cost pools that use the following activity drivers.;Product # of Setups Machine Hours Packing Orders;X 24 1,300 75;Z 24 3,900 225;Cost per Pool $60,000 $150,000 $30,000;a. What is the allocation rate for Product Z per setup using activity-based costing?;b. What is the allocation rate for Product Z per machine hours using activity-based costing?;c. What is the allocation rate for Product Z per packing order using activity-based costing? (Points: 20);4. (TCO 8) Household Manufacturing Inc. sells its product for $45 each.;Sales volume averages 2,000 units per year.;Recently, its main competitor reduced the price of its product to $30.;Maximum expects sales to drop dramatically unless it matches the competitor's price.;In addition, the current profit per unit must be maintained.;Information about the product (for production of 2,000) is as follows;Standard Quantity Actual Quantity Actual Cost;Materials (pounds) 3,200 3,500 $35,000;Labor (hours) 900 1,000 $30,000;Setups (hours) 0 125 $3,000;Material handling (moves) 0 200 $4,000;Warranties (number repaired) 0 450 $11,000;Required;a. Calculate the target cost for maintaining current market share and profitability.;b. Calculate the non-value-added cost per unit.;c. If non-value-added costs can be reduced to zero, can the target cost be achieved?;(Points: 40)


Paper#77532 | Written in 18-Jul-2015

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