Tijuana Bronze Accounting Case

Tijuana Bronze Manufacturing – Group Case

1.

Overhead Rate: $680,000 OH costs + ($16 * 168 Setup Labor hrs) / 9,725 run labor hrs = $70.20/run labor hr

Valves

Mats: $16 * 7,500 units = $120,000

Run Labor: $16 * .25 hrs * 7,500 units = $30,000

Overhead Allocation: $70.20 * .25 hrs * 7,500 units = $131,625

Total: $281,625

Standard Unit Cost = $281,625 / 7,500 units = $37.55/unit

Pumps

Mats: $20 * 12,500 units = $250,000

Run Labor: $16 * .50 hrs * 12,500 units = $100,000

Overhead Allocation: $70.20 * .50 hrs * 12,500 units = $438.750

Total: $788,750

Standard Unit Cost = $788,750 / 12,500 units = $63.10/unit

Flow Controllers

Mats: $22 * 4,000 units = $88,000

Run Labor: $16 * 0.4 hrs * 4,000 units = $25,600

Overhead Allocation: $ 70.20 * 0.4 hrs * 4,000 units = $112,320

Total: $225,920

Standard Unit Cost = $225,920 / 4,000 units = $56.48/unit

2.

Valves

Mats: $120,000 / 7,500 units = $16/unit

Run Labor: $30,000 / 7,500 units = $4/unit

Total: $20/unit

Contribution Margin = $57.78 (Selling Price) - $20 (Variable Cost) = $37.78/unit

Pumps

Mats: $250,000 / 12,500 units = $20/unit

Run Labor: $100,000 / 12,500 units = $8/unit

Total: $28/unit

Contribution Margin = $81.26 (Selling Price/Unit) - $28 (Variable Cost/Unit) = $53.26

Flow Controllers

Mats: $88,000 / 4,000 units = $22/unit

Run Labor: $25,600 / 4,000 units = $6.40/unit

Total: $28.40/unit

Contribution Margin = $97.07 (Selling Price/Unit) - $28.40 (Variable Cost/Unit) = $68.67

3.

Remaining OH Rate: $460,000 / 10,800 machine hrs = $42.59/machine hr

Valves

Mats: $16 * 7,500 units = $120,000

Setup Labor: $16 * 8 hrs * 1 run= $128

Run Labor: $16 * .25 hrs * 7,500 units = $30,000

Rec/Handle Allocation: $220,000 * ($16/$58) = $60,689.66

Remaining OH Allocation: $42.59 * .50 hrs * 7,500 units = $159,712.50...