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    Huron Automotive Company Excel

    Uploaded by

    Ansh Luthra
    1. The document presents costing information for labor hours and rates across different departments for three production activities: a 100-unit batch, spare parts inventory, and work done for other divisions. 2. A revised cost proposal is presented that lowers the total cost for the 100-unit batch by 14% and lowers the total costs for spare parts inventory and other divisions' work by 32% and 33% respectively. 3. Additional information is given on a new machine purchase and its impact on hourly rates and total costs under the present and proposed costing methods, finding a 28.35% reduction in costs and a 9.63% reduction when factoring in the new machine respectively.

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    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd

    Huron Automotive Company Excel

    Uploaded by

    Ansh Luthra
    172 views6 pages
    1. The document presents costing information for labor hours and rates across different departments for three production activities: a 100-unit batch, spare parts inventory, and work done for other divisions. 2. A revised cost proposal is presented that lowers the total cost for the 100-unit batch by 14% and lowers the total costs for spare parts inventory and other divisions' work by 32% and 33% respectively. 3. Additional information is given on a new machine purchase and its impact on hourly rates and total costs under the present and proposed costing methods, finding a 28.35% reduction in costs and a 9.63% reduction when factoring in the new machine respectively.

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    125538248-Huron-Automotive-Company-Excel.xls

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    1. The document presents costing information for labor hours and rates across different departments for three production activities: a 100-unit batch, spare parts inventory, and work done for other divisions. 2. A revised cost proposal is presented that lowers the total cost for the 100-unit batch by 14% and lowers the total costs for spare parts inventory and other divisions' work by 32% and 33% respectively. 3. Additional information is given on a new machine purchase and its impact on hourly rates and total costs under the present and proposed costing methods, finding a 28.35% reduction in costs and a 9.63% reduction when factoring in the new machine respectively.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    172 views6 pages

    Huron Automotive Company Excel

    Uploaded by

    Ansh Luthra
    1. The document presents costing information for labor hours and rates across different departments for three production activities: a 100-unit batch, spare parts inventory, and work done for other divisions. 2. A revised cost proposal is presented that lowers the total cost for the 100-unit batch by 14% and lowers the total costs for spare parts inventory and other divisions' work by 32% and 33% respectively. 3. Additional information is given on a new machine purchase and its impact on hourly rates and total costs under the present and proposed costing methods, finding a 28.35% reduction in costs and a 9.63% reduction when factoring in the new machine respectively.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    of 6

    1 Costing of a 100-unit batch of CS-29 carburetors:

    Labor rate First proposal


    Department Hours Hours (%) per hour Overhead Rate Total
    Casting / Stamping 21 17% $21.60 $31.37 $52.97 $1,112.4
    Grinding 12 10% 18.00 30.14 48.14 577.7
    Machining 58 46% 25.00 62.52 87.52 5,076.2
    Assembly 35 28% 19.00 21.19 40.19 1,406.7
    Total (Proposed) 126 100% $8,172.9
    Total (Present) 126 $55.96 $7,051.0
    Difference 1,121.9
    Difference (%) 16%

    2 Costing of spare parts for inventory:


    Labor rate First proposal
    Department Hours Hours (%) per hour Overhead Rate Total
    Casting / Stamping 304 18% $21.60 $31.37 $52.97 $16,102.9
    Grinding 270 16% 18.00 30.14 48.14 12,997.8
    Machining 1,115 66% 25.00 62.52 87.52 97,584.8
    Total (Proposed) 1,689 100% $126,685.5
    Total (Present) 1,689 $55.96 $94,516.4
    Difference 32,169.0
    Difference (%) 34%

    3 Costing of work done for other divisions:


    Labor rate First proposal
    Department Hours Hours (%) per hour Overhead Rate Total
    Casting / Stamping 674 20% $21.60 $31.37 $52.97 $35,701.8
    Grinding 540 16% 18.00 30.14 48.14 25,995.6
    Machining 2,158 64% 25.00 62.52 87.52 188,868.2
    Total (Proposed) 3,372 100% $250,565.5
    Total (Present) 3,372 $55.96 $188,697.1
    Difference 61,868.4
    Difference (%) 33%
    Revised proposal
    Overhead Rate Total
    $31.52 $53.12 $1,115.5
    28.75 46.75 561.0
    Casting /
    61.50 86.50 5,017.0 Stamping
    20.14 39.14 1,369.9
    Grinding
    $8,063.4
    Machining
    $55.96 $7,051.0
    1,012.5 Assembly
    14%

    Revised proposal
    Overhead Rate Total
    $31.52 $53.12 $16,148.5
    28.75 46.75 12,622.5 Casting /
    Stamping
    61.50 86.50 96,447.5
    $125,218.5 Grinding

    $55.96 $94,516.4 Machining


    30,702.0 Assembly
    32%

    Revised proposal
    Overhead Rate Total
    $31.52 $53.12 $35,802.9
    28.75 46.75 25,245.0
    61.50 86.50 186,667.0
    $247,714.9
    $55.96 $188,697.1
    59,017.8
    31%
    Casting /
    Stamping
    Grinding
    Machining
    Assembly

    Casting /
    Stamping
    Grinding
    Machining
    Assembly
    New machine cost $ 400,000.00
    Useful Life 5
    Depreciation per month $ 6,666.67

    Q3.a
    Present Method
    S. No. Labor Cost
    1 Casting/Stamping $ 54,604.00
    2 Grinding $ 38,520.00
    3 Machining $ 191,876.00
    4 Custom Work
    5 Labor Cost $ 81,664.00
    6 Less: Labor Cost & Hour $ 24,499.20
    7 Reduced Labor Cost & Hour (5-6) $ 57,164.80
    8 Assembly $ 291,784.00
    9 Total Labor $ 658,448.00
    10 Less: Total Labor Cost $ 24,499.20
    11 Reduced Total Labor Cost & Hour (9-10) $ 633,948.80
    12 Overhead $ 1,099,323.00
    13 Add: Depreciation $ 6,666.67
    14 Less: Var Cost $ 4,507.85
    15 New Overhead (12+13-14) $ 1,101,481.81
    16 Total Labor and Overhead (11+15) $ 1,735,430.61
    New Plant Hourly Rate $ 57.28

    Q3.b
    1st Proposed Method
    Custom Work
    Custom Overhead/ Hr $ 40.48
    Labor Hours $ 3,712.00
    Total Overhead $ 150,261.76
    Additional Overhead with new machine $ 2,158.81
    New Overhead Cost $ 152,420.57
    Reduced Labor hours $ 2,598.40
    Revised Overhead/Hr $ 58.66
    Labor Rate/Hour $ 22.00
    Total Cost/Hour $ 80.66

    Q3.c
    Total Cost under present method $ 207,723.52
    Total Cost/Hr with new machine under present method $ 148,836.35
    Decrease in Cost (in Dollars) $ 58,887.17
    Reduction (in %) 28.35%

    Total Cost under present method $ 207,723.52


    Total Cost/Hr with new machine under 1st proposed method $ 209,585.37
    Increase in Cost(in Dollars) $ 1,861.85
    Increase (in %) 0.90%

    Total Cost/Hr under 1st proposed method $ 231,925.76


    Total Cost/Hr with new machine under 1st proposed method $ 209,585.37
    Decrease in Cost(in Dollars) $ 22,340.39
    Decrease (in %) 9.63%
    Hours
    2528.00 Custom Work Cost
    2140.00
    7675.00 Hourly Rate Labor Hour Cost
    Before new machine $ 55.96 3712.00 $ 207,723.52
    3712.00 After new machine $ 57.28 2598.40 $ 148,836.35
    1113.60 Decrease (in $) $ 58,887.17
    2598.40 Decrease (%) 28.35%
    15357.00
    31412.00
    1113.60
    30298.40

    30298.40

    Hourly Rate Labor Hour Cost


    Current Method $ 55.96 3712.00 $ 207,723.52
    After new machine $ 80.66 2598.40 $ 209,585.37
    Increase (in Dollars) $ 1,861.85
    Increase (%) 0.90%

    Hourly Rate Labor Hour Cost


    Before new machine $ 62.48 3712.00 $ 231,925.76
    After new machine $ 80.66 2598.40 $ 209,585.37
    Decrease (in Dollars) $ 22,340.39
    Decrease (%) 9.63%

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