Stampout Plastics Produces Different Kinds of Products,all in One Manufacturing

question 81

Essay

Stampout Plastics produces different kinds of products,all in one manufacturing facility.They have identified four activities for their costing system:
Materials management-allocated by number of purchase orders
Chemical processing-allocated on metric tons
Molding-allocated on direct labor hours
Packaging-allocated by number of units produced
The activity rates are as follows:
$$\begin{array} { l l l } \text { Materials management } & \$ 12.00 & \text { Per purchase order } \\\text { Chemical processing } & \$ 7.50 & \text { Per metric ton } \\\text { Molding } & \$ 24.00 & \text { Per direct labor hour } \\\text { Parkaging } & \$ 0.10 & \text { Per unit }\end{array}$$ Engineering design shows that the order will require direct materials that cost $540; direct labor cost will be $90.The order will also require four purchase orders to be placed,use two metric tons of chemical base,and need eight direct labor hours.The size of the order is to produce 3,000 units of product.Calculate the total production of the order.

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Definitions:

Simple Effect

The effect of one independent variable at a particular level of another independent variable in the context of more complex experimental designs.

Interaction Effect

The combined effect of two or more independent variables on a dependent variable that is different from the effect of each variable taken individually.

Main Effect

The impact of an independent variable on a dependent variable in an experimental design, disregarding the effects of other variables.

Simple Effect

Refers to the effect of one independent variable at a specific level of another independent variable within the context of a factorial design experiment.