Compute the total costs per unit of maxiflow and alaska

Many carriers exclude fuel costs from operating expensesmaking the CASM an unreliable metric.

Compute the total costs per unit of maxiflow and alaska

Auerbach Enterprises Overview of the topic Auerbach Enterprises manufactures air conditioners for automobiles and trucks manufactured throughout North America. The company designs its products with flexibility to accommodate many makes and models of automobiles and trucks.

The company's two main products are MaxiFlow and Alaska. MaxiFlow uses a few complex fabricated parts, but these have been found easy to assemble and test. On the other hand, Alaska uses many standard parts but has a complex assembly and testing process.

Auerbach Enterprises uses machine hours as the cost driver to assign overhead costs to the air conditioners. The company has used a company-wide predetermined overhead rate in past years, but the new controller, Bennie Leon, is considering the use of departmental overhead rates beginning with the next year.

The following planning information is available for the next year for each the four manufacturing departments within the company.

Compute the total costs per unit of maxiflow and alaska

It is mentioned in the next page. Overhead Machine Costs Hours Radiator parts fabrication A production batch of 20 units requires the following number of hours in each department: Maxi Flow Alaska Radiator parts fabrication Question 1 In today's competitive economy, manufacturing companies have to be careful not to put money and resources in an investment that cannot yield an appropriate return.

And, one must realize that cost analysis is a tool to determine if an investment is a good or a bad business; therefore, most manufacturing companies are careful as they face a number of decisions that can directly or indirectly affect the cost of goods sold COGS.

Whether the manufacturing company is a large company or a small company, cost analysis is important. Some of the direct decisions that managers make involve material selection, manufacturing process selection, man hours required, and machine hours required Lee, Some of the indirect decisions involve maintenance, turnover, quality, and administration.

At the end, a bad business deal occurs when the costs to provide a given product or service are underestimated, and thus a loss of capital and investment is inflicted on the company.

Alternately, when the costs are overestimated the company is not able to compete in the market.Compute a company-wide overhead rate using machine hours as the cost driver. 3. Compute the overhead costs per batch of MaxiFlow and Alaska assuming: (a) The company-wide rate. (b) The departmental rates.

4. Compute the total costs per unit of MaxiFlow and Alaska assuming: (a) The company-wide rate. (b) The departmental rates. 5. Is one product. A BTU, or British Thermal Unit, is the quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit. The current charge for natural gas from Peoples Gas is $ per .

2. Compute a company-wide overhead rate using machine hours as the cost driver. 3. Compute the overhead costs per batch of MaxiFlow and Alaska assuming: (a) The company-wide rate.

(b) The departmental rates. 4. Compute the total costs per unit of MaxiFlow and Alaska assuming: (a) The company-wide rate. (b) The departmental rates. 5. MaxiFlow requires direct materials costs which total $ per unit, while Alaska%us direct materials requirements total $ per unit.

Direct labor costs per unit are $75 for MaxiFlow and $95 for Alaska/5(K).

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MaxiFlow requires direct materials costs which total $ per unit, while Alaskas direct materials requirements total $ per unit. Direct labor costs per unit are $75 for MaxiFlow and $95 for Alaska. Total Required: 1. Compute the departmental overhead rates using machine hours as the cost driver.

2. Compute a company-wide overhead rate using machine hours as the cost driver. 3. Compute the overhead costs per batch of MaxiFlow and Alaska assuming: (a) The company-wide rate. (b) The departmental rates.

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His week 6 discussion question 2 - [DOCX Document]