CIMA Engineering Uses a Manufacturing Costing System with One Direct

question 52

Essay

CIMA Engineering uses a manufacturing costing system with one direct cost category (direct materials)and three indirect cost categories:
In response to competitive pressures at the end of 2019, Medical Instruments used value-engineering
techniques to reduce manufacturing costs.Actual information for 2018 and 2019 is:
The management of CIMA Engineering wants to evaluate whether value engineering has succeeded in
reducing the target manufacturing cost per unit of one of its flow controllers by 10%.Actual results for 2018 and 2019 for the flow controller are:
Required:
a.Calculate the manufacturing cost for both years.

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Definitions:

Indifference Curves

Indifference curves are graphical representations used in microeconomics to show combinations of two goods among which a consumer is indifferent, reflecting their preferences and consumption choices.

Marginal Utility

The change in satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Utility-Maximizing

The concept in economics and consumer theory where individuals or firms make decisions that lead to the highest level of satisfaction or benefit within their constraints.

Total Utility

The cumulative satisfaction or usefulness that a person gains from consuming all units of a particular good or service.