Fremont Systems Produces Two Different Products,Product A,which Sells for $1,000

question 11

Essay

Fremont Systems produces two different products,Product A,which sells for $1,000 per unit,and Product B,which sells for $2,000 per unit,using three different activities: Design,which uses Engineering Hours as an activity driver;Machining,which uses machine hours as an activity driver;and Inspection,which uses number of batches as an activity driver.The cost of each activity and usage of the activity drivers are as follows:
Fremont manufactures 10,000 units of Product A and 7,500 units of Product B per month.Each unit of Product A uses $500 of direct materials and $200 of direct labor,while each unit of Product B uses $750 of direct materials and $350 of direct labor.
Required:
a.Calculate the Design activity proportions for Products A and B.
b.Calculate the Machining activity proportions for Products A and B.
c.Calculate the Inspection activity proportions for Products A and B.
d.Determine the indirect costs assigned to Product A.
e.Determine the indirect costs assigned to Product B.
f.Determine the manufacturing cost per unit for Product A.
g.Determine the manufacturing cost per unit for Product B.
h.Determine the gross profit per unit for Product A.
i.Determine the gross profit per unit for Product B.

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Definitions:

Cognitive Map

An internal psychological representation of the spatial layout of the external world.

Discriminative Stimulus

A specific stimulus in the presence of which a particular response is more likely to be reinforced.

Fixed-Interval Schedule

In operant conditioning, a reinforcement schedule that reinforces a response only after a specified time has elapsed.

Latent Learning

Latent learning is the process by which knowledge is acquired without any immediate manifestation of learned behavior or obvious reinforcement.