Question

In Problem 2-3, if the direct manufacturing cost for cabinets is $27 and the rework cost is $8, compute the manufacturing cost per good product. Determine the manufacturing cost per product if the percentage of good-quality fi le cabinets is increased from 83% to 90%.

Answer 1

A. $29.85

B. $28.63

Step-by-step explanation:

Manufacturing costs are costs that are incurred when creating or producing a product. It includes cost of machinery, cost of operating the machinery

A. manufacturing cost per good product

=
`(27*150 + 8(15))/(139) =(4170)/(139)`

= $29.85 per cabinet when quality is 83%

B. manufacturing cost per product if the percentage of good-quality cabinets is increased from 83% to 90%.

=
`(27*150 + 8(9))/(144) =(4122)/(144)`

=$28.63 per cabinet when quality is increased to 90%