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  • COST ANALYSIS OF MINNESOTA OFFICE PRODUCTS

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    KArina Calle Rivera
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    Minnesota Office Products produced 300 units total, with Supreme units at 80, Deluxe at 120, and Regular at 100. Total direct materials cost $200 million and total direct manufacturing labor cost $90 million. Canseco Company's beginning inventory levels were $22,000 for direct materials, $21,000 for work-in-process, and $18,000 for finished goods. Ending inventory levels were $26,000, $20,000, and $23,000 respectively. Westec paid sales representative I. Blacklaw a $5,000 bonus for causing a rush order that generated $50,000 in additional gross margin.

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    Minnesota Office Products produced 300 units total, with Supreme units at 80, Deluxe at 120, and Regular at 100. Total direct materials cost $200 million and total direct manufacturing labor cost $90 million. Canseco Company's beginning inventory levels were $22,000 for direct materials, $21,000 for work-in-process, and $18,000 for finished goods. Ending inventory levels were $26,000, $20,000, and $23,000 respectively. Westec paid sales representative I. Blacklaw a $5,000 bonus for causing a rush order that generated $50,000 in additional gross margin.

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    6 views4 pages

    COST ANALYSIS OF MINNESOTA OFFICE PRODUCTS

    Uploaded by

    KArina Calle Rivera
    Minnesota Office Products produced 300 units total, with Supreme units at 80, Deluxe at 120, and Regular at 100. Total direct materials cost $200 million and total direct manufacturing labor cost $90 million. Canseco Company's beginning inventory levels were $22,000 for direct materials, $21,000 for work-in-process, and $18,000 for finished goods. Ending inventory levels were $26,000, $20,000, and $23,000 respectively. Westec paid sales representative I. Blacklaw a $5,000 bonus for causing a rush order that generated $50,000 in additional gross margin.

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    Minnesota Office Products (after cost analysis by consultant) Direct materials Direct manufacturing labor Direct energy costs

    Other manufacturing overhead costs Units produced

    (in millions) Supreme Deluxe Regular Total $84 $54 $62 $200 14 28 8 50 39.8 40.7 9.5 90 16.8 33.6 9.6 60 80 120 100 300

    Canseco Company Direct materials inventory Work-in-process inventory Finished goods inventory Purchases of direct materials Direct manufacturing labor Indirect manufacturing labor Plant Insurance Depreciation -- plant and building, and equipment Repairs and maintenance -- plant Marketing, distribution, and customer-service costs General and administrative costs

    Beginning End of 2007 of 2007 $22,000 $26,000 21,000 20,000 18,000 23,000 75,000 25,000 15,000 9,000 11,000 4,000 93,000 29,000

    (in $000s) Customer Sales Representative Revenues Cost of goods sold: Direct Materials Direct manufacturing labor Indirect manufacturing labor Overtime costs Total cost of goods sold Gross margin Bonus earned by salesperson

    Westec caused rush order Westec Pinnacle I. Blacklaw G. Benson $420,000 $460,000 $230,000 40,000 80,000 20,000 370,000 50,000 $5,000 $260,000 40,000 80,000

    Pinnacle caused rush order Westec Pinnacle I. Blacklaw G. Benson $420,000 $460,000 $230,000 40,000 80,000 $260,000 40,000 80,000

    Neither caused rush order Westec Pinnacle I. Blacklaw G. Benson $420,000 $460,000 $230,000 40,000 80,000 $260,000 40,000 80,000

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