I really need help with this question. I keep doing it wrong so can anyone help me please.
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The maori novelty company makes a variety of souvenirs for visitors to New Zealand. The Otago division manufactures stuffed kiwi birds using a highly automated operation. A recently installed activity based costing system has four acitivities:
Activity CostDriver Rate
Materials handling Kilograms of materials $1.20 per kg
Production setup # of setup $60 per setup
Cuttting, sewing etc # of units $0.40 per unit
Packaging and shipping #of orders $10 per order
Two products are called Standard kiwi and giant kiwi. They require 0.20 and 0.40 kg, respectively, at a material cost of 1.30 for standard kiwis and 2.20 for giant kiwis. One computer controlled assembly line makes all the products. When a production run of a different product is started, a setup procedure is required to reprogram the computers and make other changes in the process. Products are packed and shipped separately so a request from a customer for, say, 3 different products is considered 3 different orders Ausiland Waterfront market just placed an order for 100 standard kiwis and 50 giant kiwis.
1. Suppose the products made for Ausiland Waterfront required “AWM” to be printed on each kiwi. Because of the automated process, printing the initials takes no extra time or materials but it requires a special production setup for each product. Compute the cost of production.
Why did the kiwi get a tattoo? Because it wanted to be "a-wesome"!
To compute the cost of production for the order from Ausiland Waterfront, let's break it down:
For the Standard kiwi:
- Material cost: 0.20 kg * $1.20/kg = $0.24
- Production setup: 1 setup * $60/setup = $60
- Cutting, sewing, etc.: 100 units * $0.40/unit = $40
- Packaging and shipping: 1 order * $10/order = $10
Total cost for Standard kiwis = $0.24 + $60 + $40 + $10 = $114.24
For the Giant kiwi:
- Material cost: 0.40 kg * $1.20/kg = $0.48
- Production setup: 1 setup * $60/setup = $60
- Cutting, sewing, etc.: 50 units * $0.40/unit = $20
- Packaging and shipping: 1 order * $10/order = $10
Total cost for Giant kiwis = $0.48 + $60 + $20 + $10 = $90.48
So, the total cost of production for the order from Ausiland Waterfront, including both Standard and Giant kiwis, is $114.24 + $90.48 = $204.72.
Hope that helps! If you have any more questions, feel free to ask.
To compute the cost of production for the order placed by Ausiland Waterfront market, we need to calculate the costs for each activity:
1. Materials handling:
- Standard kiwis: 100 units x 0.20 kg = 20 kg
- Giant kiwis: 50 units x 0.40 kg = 20 kg
Total materials handling cost = (20 kg + 20 kg) x $1.20 per kg = $48
2. Production setup:
Since there are two products (standard kiwis and giant kiwis), there will be two production setups required.
Total production setup cost = 2 setups x $60 per setup = $120
3. Cutting, sewing, etc:
- Standard kiwis: 100 units x $0.40 per unit = $40
- Giant kiwis: 50 units x $0.40 per unit = $20
Total cutting, sewing, etc. cost = $40 + $20 = $60
4. Packaging and shipping:
Since the order includes two different products (standard kiwis and giant kiwis), it will be considered as two separate orders.
Total packaging and shipping cost = 2 orders x $10 per order = $20
Therefore, the total cost of production for the order placed by Ausiland Waterfront market is:
$48 (materials handling) + $120 (production setup) + $60 (cutting, sewing, etc.) + $20 (packaging and shipping) = $248
To compute the cost of production for the order placed by Ausiland Waterfront Market, we need to calculate the costs for each activity involved in manufacturing the Standard kiwis and Giant kiwis.
1. Materials handling:
- Standard kiwis require 0.20 kg each, so the total material handling cost for Standard kiwis is: 0.20 kg * $1.20/kg = $0.24.
- Giant kiwis require 0.40 kg each, so the total material handling cost for Giant kiwis is: 0.40 kg * $1.20/kg = $0.48.
2. Production setup:
- Since two different products are being manufactured (Standard kiwi and Giant kiwi), we need to consider two separate setup procedures.
- Each setup procedure costs $60, so the production setup cost is 2 * $60 = $120.
3. Cutting, sewing, etc.:
- Standard kiwis require 100 units, so the cutting, sewing, etc. cost for Standard kiwis is: 100 units * $0.40/unit = $40.
- Giant kiwis require 50 units, so the cutting, sewing, etc. cost for Giant kiwis is: 50 units * $0.40/unit = $20.
4. Packaging and shipping:
- Since Ausiland Waterfront Market placed one order for both products, we consider it as one order.
- The packaging and shipping cost for the order is: 1 order * $10/order = $10.
Now, let's calculate the total cost of production:
- Standard kiwis: Material handling ($0.24) + Production setup ($60) + Cutting, sewing, etc. ($40) + Packaging and shipping ($10) = $0.24 + $60 + $40 + $10 = $110.24.
- Giant kiwis: Material handling ($0.48) + Production setup ($60) + Cutting, sewing, etc. ($20) + Packaging and shipping ($10) = $0.48 + $60 + $20 + $10 = $90.48.
Therefore, the total cost of production for the order of 100 Standard kiwis and 50 Giant kiwis is $110.24 + $90.48 = $200.72.