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Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view more data) Read the requirements. Individual unit time for Cumulative total time: Labor-hours Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. Begin by calculating the cumulative total time in labor-hours using the incremental unit-time learning model. (Round the individual unit time for Xth unit to the nearest whole number.) Cumulative number of units Xth unit: Labor-hours Data table 1 2 3 4 3,700 3,700 3,145 6,845 2,860 9,705 Direct materials cost 2,673 12,378 Direct manufacturing labor time for first unit Now calculate the total variable costs of producing 2, 3, and 4 units. Learning curve for manufacturing labor time per radar system Direct manufacturing labor costs $ 89,000 per unit of RS-32 3,700 direct manufacturing labor-hours 85% incremental unit-time" $ Variable costs of producing Variable manufacturing overhead costs 2 Units 3 Units 4 Units Direct materials 178000 267000 356000 Using the formula for an 85% learning curve, b = In 0.85 In 2 0.162519 0.693147 20 per direct manufacturing labor-hour 18 per direct manufacturing labor-hour = -0.234465 Direct manufacturing labor 62900 53460 56610 48114 45440 40896 Variable manufacturing overhead 297510 368574 Total variable costs 442336 Print Done

Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view more data) Read the requirements. Individual unit time for Cumulative total time: Labor-hours Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. Begin by calculating the cumulative total time in labor-hours using the incremental unit-time learning model. (Round the individual unit time for Xth unit to the nearest whole number.) Cumulative number of units Xth unit: Labor-hours Data table 1 2 3 4 3,700 3,700 3,145 6,845 2,860 9,705 Direct materials cost 2,673 12,378 Direct manufacturing labor time for first unit Now calculate the total variable costs of producing 2, 3, and 4 units. Learning curve for manufacturing labor time per radar system Direct manufacturing labor costs $ 89,000 per unit of RS-32 3,700 direct manufacturing labor-hours 85% incremental unit-time" $ Variable costs of producing Variable manufacturing overhead costs 2 Units 3 Units 4 Units Direct materials 178000 267000 356000 Using the formula for an 85% learning curve, b = In 0.85 In 2 0.162519 0.693147 20 per direct manufacturing labor-hour 18 per direct manufacturing labor-hour = -0.234465 Direct manufacturing labor 62900 53460 56610 48114 45440 40896 Variable manufacturing overhead 297510 368574 Total variable costs 442336 Print Done

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 41P: Harriman Industries manufactures engines for the aerospace industry. It has completed manufacturing...
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Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view more data) Read the requirements. Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. Begin by calculating the cumulative total time in labor-hours using the incremental unit-time learning model. (Round the individual unit time for Xth unit to the nearest whole number.) Cumulative Cumulative total time: Individual unit time for number of units Xth unit: Labor-hours Labor-hours Data table 1 2 3,700 3,700 3,145 6,845 3 2,860 9,705 Direct materials cost $ 89,000 per unit of RS-32 4 2,673 12,378 Direct manufacturing labor time for first unit Now calculate the total variable costs of producing 2, 3, and 4 units. Variable costs of producing Learning curve for manufacturing labor time per radar system Direct manufacturing labor costs 3,700 direct manufacturing labor-hours 85% incremental unit-time $ 20 per direct manufacturing labor-hour Variable manufacturing overhead costs $ 18 per direct manufacturing labor-hour 2 Units 3 Units 4 Units Direct materials 178000 267000 Direct manufacturing labor 62900 53460 56610 48114 356000 45440 40896 aUsing the formula for an 85% learning curve, b = In 0.85 In 2 -0.162519 0.693147 = -0.234465 Variable manufacturing overhead 297510 368574 Total variable costs 442336 Print Done
Transcribed Image Text:Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view more data) Read the requirements. Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. Begin by calculating the cumulative total time in labor-hours using the incremental unit-time learning model. (Round the individual unit time for Xth unit to the nearest whole number.) Cumulative Cumulative total time: Individual unit time for number of units Xth unit: Labor-hours Labor-hours Data table 1 2 3,700 3,700 3,145 6,845 3 2,860 9,705 Direct materials cost $ 89,000 per unit of RS-32 4 2,673 12,378 Direct manufacturing labor time for first unit Now calculate the total variable costs of producing 2, 3, and 4 units. Variable costs of producing Learning curve for manufacturing labor time per radar system Direct manufacturing labor costs 3,700 direct manufacturing labor-hours 85% incremental unit-time $ 20 per direct manufacturing labor-hour Variable manufacturing overhead costs $ 18 per direct manufacturing labor-hour 2 Units 3 Units 4 Units Direct materials 178000 267000 Direct manufacturing labor 62900 53460 56610 48114 356000 45440 40896 aUsing the formula for an 85% learning curve, b = In 0.85 In 2 -0.162519 0.693147 = -0.234465 Variable manufacturing overhead 297510 368574 Total variable costs 442336 Print Done
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