Lens Care Inc. (LCI) manufactures specialized equipment forpolishing optical lenses. There are two models - one mainly usedfor fine eyewear (F-32) and another for lenses used in binoculars,cameras, and similar equipment (B-13). The manufacturing cost ofeach unit is calculated using activity-based costing; using thefollowing manufacturing cost pools.
CostPools AllocationBase CostingRate 1. Materials handling Number of parts $2.40 per part 2. Manufacturingsupervision Hours of machine time $14.80 per hour 3. Assembly Number of parts $3.30 per part 4. Machine setup Each setup $56.50 per setup 5. Inspection and testing Logged hours $45.50 per hour 6. Packaging Logged hours $19.50 per hour
LCI currently sells the B-13 model for $1,925 and the F-32 modelfor $982. Manufacturing costs and activity usage for the twoproducts are as follows:
B-13 F-32 Direct materials $188.50 $109.90 Number of parts 195 115 Machine Hours 8.5 8.2 Inspection time 1.75 1.25 Packaging time 0.75 0.5 Set-ups 4 1
7) The product cost for model B-13 is calculated to be:
Answer: ___________________
8) The product cost for model F-32 is calculated to be:
Answer: ___________________
9) The product margin for model B-13 is calculated to be:
Answer: _____________________
10) The product margin for model F-32 is calculated to be:
Answer: ______________________
Lens Care Inc. (LCI) manufactures specialized equipment forpolishing optical lenses. There are two models - one mainly usedfor fine eyewear (F-32) and another for lenses used in binoculars,cameras, and similar equipment (B-13). The manufacturing cost ofeach unit is calculated using activity-based costing; using thefollowing manufacturing cost pools.
| CostPools | AllocationBase | CostingRate |
| 1. Materials handling | Number of parts | $2.40 per part |
| 2. Manufacturingsupervision | Hours of machine time | $14.80 per hour |
| 3. Assembly | Number of parts | $3.30 per part |
| 4. Machine setup | Each setup | $56.50 per setup |
| 5. Inspection and testing | Logged hours | $45.50 per hour |
| 6. Packaging | Logged hours | $19.50 per hour |
LCI currently sells the B-13 model for $1,925 and the F-32 modelfor $982. Manufacturing costs and activity usage for the twoproducts are as follows:
| B-13 | F-32 | |
| Direct materials | $188.50 | $109.90 |
| Number of parts | 195 | 115 |
| Machine Hours | 8.5 | 8.2 |
| Inspection time | 1.75 | 1.25 |
| Packaging time | 0.75 | 0.5 |
| Set-ups | 4 | 1 |
7) The product cost for model B-13 is calculated to be:
Answer: ___________________
8) The product cost for model F-32 is calculated to be:
Answer: ___________________
9) The product margin for model B-13 is calculated to be:
Answer: _____________________
10) The product margin for model F-32 is calculated to be:
Answer: ______________________
Related questions
Lens Care Inc. (LCI) manufactures specialized equipment forpolishing optical lenses. There are two models - one mainly usedfor fine eyewear (F-32) and another for lenses used in binoculars,cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated usingactivity-based costing, using the following manufacturing costpools:
| CostPools | Allocation Base | CostingRate |
| Materialshandling | Number ofparts | $2.40 perpart |
| Manufacturingsupervision | Hours of machinetime | $14.80 perhour |
| Assembly | Number ofparts | $3.30 perpart |
| Machinesetup | Each setup | $56.50 persetup |
| Inspection andtesting | Loggedhours | $45.50 perhour |
| Packaging | Loggedhours | $19.50 perhour |
LCI currently sells the B-13 model for $1,775 and the F-32 modelfor $1,220. Manufacturing costs and activity usage for the twoproducts are as follows:
| B-13 | F-32 | |
| Directmaterials | $164.50 | $75.60 |
| Number ofparts | 160.00 | 120.00 |
| Machinehours | 7.90 | 4.20 |
| Inspectiontime | 1.70 | 0.80 |
| Packagingtime | 0.90 | 0.50 |
| Setups | 3.00 | 2.00 |
The product cost for model B-13 is:
$1,457.82.
$1,293.32.
$1,159.34.
$905.31.
$980.91.
