Worcester Manufacturing Produces Electronic Storage Devices, and Uses the Following

question 189

Essay

Worcester Manufacturing produces electronic storage devices, and uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and indirect manufacturing costs. Total indirect manufacturing costs for January were $300 million, and were allocated to each product on the basis of direct manufacturing labor costs of each line. Summary data (in millions) for January for the most popular electronic storage device, the Big Brain, was:

Required:
a.Compute the manufacturing cost per unit for each product produced in January.
b.Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in January; it is not necessary to calculate the exact February unit cost. Briefly explain your reasoning.

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Definitions:

Equity

The principle of fairness and justice in the way people are treated, focusing on providing the resources and opportunities needed to achieve equal outcomes.

Redistributive Justice

The practice or principle of adjusting the distribution of wealth, goods, or resources in a society to achieve fairness or equality.

Equanimity

A mental or emotional stability or composure, especially under tension or strain; calmness.

Distributive And Redistributive Justice

A social justice model that is concerned with the fair distribution or redistribution of material and non-material resources between different groups within a society.