Management at Kirkland Machine Tool Co. is considering the development of a new automated drill press called the Auto Drill. After conferring with the design engineers., the controller's staff assembled the following data about this project. Target selling price $ 7,500.00 Desired profit percentage 25% of total unit cost Projected unit demand 4500 units Activity-based cost rates Materials handling activity 5% of raw materials and purchased parts cost Engineering activity $300 per unit for Auto Drill Production and assembly activity $50 per machine hour Delivery activity $570 per unit for Auto Drill Marketing activity $400 per unit for Auto Drill Per unit data Raw Materials cost $ 1,620.00 Purchased parts cost $ 840.00 Manufacturing labor hours 6 hours Hourly rate $ 14.00 Assembly labor hours 10 hours Hourly labor rate $ 15.00 Machine hours 30 hours A) Compute the product's Target cost. B) Compute the product's projected unit cost based on the design engineers estimates. C) should management produce and market the Auto Drill? Defend your answer.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
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1) Management at Kirkland Machine Tool Co. is considering the development of a new automated |
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drill press called the Auto Drill. After conferring with the design engineers., the controller's staff |
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assembled the following data about this project. |
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Target selling price |
$ 7,500.00 |
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Desired profit percentage |
25% of total unit cost |
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Projected unit demand |
4500 units |
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Activity-based cost rates |
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Materials handling activity |
5% of raw materials and purchased parts cost |
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Engineering activity |
$300 per unit for Auto Drill |
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Production and assembly activity |
$50 per machine hour |
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Delivery activity |
$570 per unit for Auto Drill |
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Marketing activity |
$400 per unit for Auto Drill |
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Per unit data |
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Raw Materials cost |
$ 1,620.00 |
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Purchased parts cost |
$ 840.00 |
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Manufacturing labor hours |
6 hours |
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Hourly rate |
$ 14.00 |
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Assembly labor hours |
10 hours |
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Hourly labor rate |
$ 15.00 |
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Machine hours |
30 hours |
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A) Compute the product's Target cost. |
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B) Compute the product's projected unit cost based on the design engineers estimates. |
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C) should management produce and market the Auto Drill? Defend your answer. |
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