Solution to Chapter 5 E5‐26,27 &32 EXERCISE 5-26 (15 MINUTES)
1.
Material-handling cost per mirror:
*The total number of direct-labor hours.
An alternative calculation, since both types of product use the same amount of the
cost driver, is the following:
*The total number of units (of both types) produced.
2.
Material-handling cost per lens = $1,500. The analysis is identical to that given for
requirement (1).
3.
Material-handling cost per mirror:
*The total number of material moves.
†The number of material moves for the mirror product line.
4.
Material-handling cost per lens:
*The number of material moves for the lens product line.
EXERCISE 5-27 (20 MINUTES)
There is no single correct answer to this exercise. There are many reasonable solutions.
Cost pool 1:
Raw materials and components ......................................................................
Inspection .........................................................................................................
Total....................................................................................................................
3,835,000 yen
39,000 yen
3,874,000 yen
Cost driver: raw-material cost
Cost pool 2:
Depreciation, machinery...................................................................................
Electricity, machinery .......................................................................................
Equipment maintenance, wages......................................................................
Equipment maintenance, parts........................................................................
Total....................................................................................................................
1,820,000 yen
156,000 yen
195,000 yen
39,000 yen
2,210,000 yen
Cost driver: number of units produced.
Cost pool 3:
Setup wages ......................................................................................................
Total....................................................................................................................
52,000 yen
52,000 yen
Cost driver: number of production runs.
Cost pool 4:
Engineering design...........................................................................................
Total....................................................................................................................
Cost driver: number of parts in a product.
793,000 yen
793,000 yen
EXERCISE 5-27 (CONTINUED)
Cost pool 5:
Depreciation, plant............................................................................................
Insurance, plant.................................................................................................
Electricity, light .................................................................................................
Custodial wages, plant .....................................................................................
Property taxes ...................................................................................................
Natural gas, heating..........................................................................................
Total....................................................................................................................
910,000 yen
780,000 yen
78,000 yen
52,000 yen
156,000 yen
39,000 yen
2,015,000 yen
Cost driver: for costs allocated to support departments, square footage; for costs
assigned to products, number of units produced.
EXERCISE 5-32 (20 MINUTES)
The activities of the Seneca Falls Winery may be classified as follows:
U: Unit-level
B: Batch-level
P: Product-sustaining-level
F: Facility-level
EXERCISE 5-32 (CONTINUED)
Activity
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Classification
P
P
P
P
P
P
P
B
B
B
Activity
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
Classification
B
B
U
U
U
U
B
F
F