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6 16.7 points ellook Print References Kallapur Company manufactures two products: KAP1, which sells for $120; and QUIN, which sells for $220. Estimated cost and production data for the current year are as follows. Direct materials cost Direct labor cost (@ $12/hr) Estimated production (units) In addition, fixed manufacturing overhead is estimated to be $2,000,000 and variable overhead is estimated to equal $3 per direct labor hour. Kallapur desires a 15 percent return on sales for all of its products. KAPI $30 $24 25,000 Required: a. Calculate the target cost for both KAPI and QUIN. b-1. Estimate the total manufacturing cost per unit of each product if fixed overhead costs are assigned to products on the basis of estimated production in units. b-2. Which of the products is earning the desired return? c-1. Recalculate the total manufacturing cost per unit if fixed overhead costs are assigned to products on the basis of direct labor hours.. Activity Machine set-ups Purchase orders QUIN $45 $60 15,000 c-2. Which of the products is earning the desired return? d. On the basis of the confusing results of parts b and c, Kallapur's manager decides to perform an activity analysis of fixed overhead. The results of the analysis are as follows. Machining Inspection Shipping to customers Total fixed overhead Costs $ 400,000 600,000 500,000 200,000 300,000 $2,000,000 Driver Req A of set-ups # of orders of machine-hours. # of batches # of shipments Demands KAP1 100 200 2,000 50 300 Complete this question by entering your answers in the tabs below. d-1. Estimate the total manufacturing cost per unit of each product if activity-based costing is used for assigning fixed overhead costs. QUIN 400 100 6,000 30 200 d-2. Under this method, which product is earning the desired return? 1-1. Kallapur's production manager believes that design changes would reduce the number of set-ups required for QUIN to 25. Fixed overhead costs for set-ups would remain unchanged. What will be the impact of the design changes on the manufacturing costs of both products? f-2. Which of the products will earn the desired return? g-1. An alternative to the design change is to purchase a new machine that will reduce the number of set-ups for KAP1 to 20 and the number of set-ups for QUIN to 80. The machine will also reduce fixed set-up costs to $200,000. Calculate the manufacturing costs for each product if the machine is purchased. g-2. Should Kallapur purchase the new machine? Req B1 and B2 Req C1 and C2 Req D1 and D2 Req F1 and F2 Req G1 and G2 An alternative to the design change is to purchase a new machine that will reduce the number of set-ups for KAP1 to 20 and the number of set-ups for QUIN to 80. The machine will also reduce fixed set-up costs to $200,000. Calculate the manufacturing costs for each product if the machine is purchased. Should Kallapur purchase the new machine? (Round your intermediate calculations and final answers to 2 decimal places.) Show less &
6 b-2. Which of the products is earning the desired return? c-1. Recalculate the total manufacturing cost per unit if fixed overhead costs are assigned to products on the basis of direct labor hours. c-2. Which of the products is earning the desired return? d. On the basis of the confusing results of parts b and c, Kallapur's manager decides to perform an activity analysis of fixed overhead. The results of the analysis are as follows. 7 nts eBook Print eferences Activity Machine set-ups Purchase orders Machining Inspection Shipping to customers. Total fixed overhead Costs $ 400,000 600,000 500,000 200,000 300,000 $2,000,000 Req A Complete this question by entering your answers in the tabs below. KAPI Total manufacturing cost per unit Should Kallapur purchase the new machine? Driver # of orders # of machine-hours # of batches # of shipments of set-ups d-1. Estimate the total manufacturing cost per unit of each product if activity-based costing is used for assigning fixed overhead costs. d-2. Under this method, which product is earning the desired return? f-1. Kallapur's production manager believes that design changes would reduce the number of set-ups required for QUIN to 25. Fixed overhead costs for set-ups would remain unchanged. What will be the impact of the design changes on the manufacturing costs of both products? QUIN $ 182.00 Yos -f-2. Which of the products will earn the desired return? g-1. An alternative to the design change is to purchase a new machine that will reduce the number of set-ups for KAP1 to 20 and the number of set-ups for QUIN to 80. The machine will also reduce fixed set-up costs to $200,000. Calculate the manufacturing costs for each product if the machine is purchased. g-2. Should Kallapur purchase the new machine? < Req F1 and F2 KAP1 100 200 2,000 Req B1 and B2 Reg C1 and C2 Req D1 and D2 Req F1 and F2 Req G1 and G2 An alternative to the design change is to purchase a new machine that will reduce the number of set-ups for KAP1 to 20 and the number of set-ups for QUIN to 80. The machine will also reduce fixed set-up costs to $200,000. Calculate the manufacturing costs for each product if the machine is purchased. Should Kallapur purchase the new machine? (Round your intermediate calculations and final answers to 2 decimal places.) Demands 50 300 QUIN 400 100 6,000 Reg 01 and 02 7 30 200 Show less A