Huron Automotive Company_Excel

1 Costing of a 100-unit batch of CS-29 carburetors: Department Casting / Stamping Grinding Machining Assembly Total (Proposed) Total (Present) Difference Difference (%)

Hours

Labor rate First proposal Hours (%) per hour Overhead Rate Total

21 12 58 35 126 126

17% 10% 46% 28% 100%

$21.60 18.00 25.00 19.00

$31.37 30.14 62.52 21.19

$52.97 48.14 87.52 40.19 $55.96

Rev

$1,112.4 577.7 5,076.2 1,406.7 $8,172.9 $7,051.0 1,121.9 16%

2 Costing of spare parts for inventory: Department Casting / Stamping Grinding Machining Total (Proposed) Total (Present) Difference Difference (%)

Hours 304 270 1,115 1,689 1,689

Labor rate First proposal Hours (%) per hour Overhead Rate Total 18% 16% 66% 100%

$21.60 18.00 25.00

$31.37 30.14 62.52

Rev

$52.97 48.14 87.52

$16,102.9 12,997.8 97,584.8 $126,685.5 $55.96 $94,516.4 32,169.0 34%

3 Costing of work done for other divisions: Department Casting / Stamping Grinding Machining Total (Proposed) Total (Present) Difference Difference (%)

Hours 674 540 2,158 3,372 3,372

Labor rate First proposal Hours (%) per hour Overhead Rate Total 20% 16% 64% 100%

$21.60 18.00 25.00

$31.37 30.14 62.52

$52.97 48.14 87.52

$35,701.8 25,995.6 188,868.2 $250,565.5 $55.96 $188,697.1 61,868.4 33%

Rev

Revised proposal Overhead Rate Total $31.52 28.75 61.50 20.14

$53.12 46.75 86.50 39.14 $55.96

$1,115.5 561.0 5,017.0 1,369.9 $8,063.4 $7,051.0 1,012.5 14%

Casting / Stamping Grinding Machining Assembly

Revised proposal Overhead Rate Total $31.52 28.75 61.50

$53.12 46.75 86.50

$16,148.5 12,622.5 96,447.5 $125,218.5 $55.96 $94,516.4 30,702.0 32%

Revised proposal Overhead Rate Total $31.52 28.75 61.50

$53.12 46.75 86.50

$35,802.9 25,245.0 186,667.0 $247,714.9 $55.96 $188,697.1 59,017.8 31%

Casting / Stamping Grinding Machining Assembly

Casting / Stamping Grinding Machining Assembly

Casting / Stamping Grinding Machining Assembly

New machine cost Useful Life Depreciation per month

S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Q3.a Present Method Labor Casting/Stamping Grinding Machining Custom Work Labor Cost Less: Labor Cost & Hour Reduced Labor Cost & Hour (5-6) Assembly Total Labor Less: Total Labor Cost Reduced Total Labor Cost & Hour (9-10) Overhead Add: Depreciation Less: Var Cost New Overhead (12+13-14) Total Labor and Overhead (11+15) New Plant Hourly Rate Q3.b 1st Proposed Method Custom Work Custom Overhead/ Hr Labor Hours Total Overhead Additional Overhead with new machine New Overhead Cost Reduced Labor hours Revised Overhead/Hr Labor Rate/Hour Total Cost/Hour Q3.c Total Cost under present method Total Cost/Hr with new machine under present method Decrease in Cost (in Dollars) Reduction (in %)

$ $

400,000.00 5 6,666.67

$ $ $

Cost 54,604.00 38,520.00 191,876.00

$ 81,664.00 $ 24,499.20 $ 57,164.80 $ 291,784.00 $ 658,448.00 $ 24,499.20 $ 633,948.80 $ 1,099,323.00 $ 6,666.67 $ 4,507.85 $ 1,101,481.81 $ 1,735,430.61 $ 57.28

$ $ $ $ $ $ $ $ $

40.48 3,712.00 150,261.76 2,158.81 152,420.57 2,598.40 58.66 22.00 80.66

$ $ $

207,723.52 148,836.35 58,887.17 28.35%

Total Cost under present method Total Cost/Hr with new machine under 1st proposed method Increase in Cost(in Dollars) Increase (in %)

$ $ $

207,723.52 209,585.37 1,861.85 0.90%

Total Cost/Hr under 1st proposed method Total Cost/Hr with new machine under 1st proposed method Decrease in Cost(in Dollars) Decrease (in %)

$ $ $

231,925.76 209,585.37 22,340.39 9.63%

Hours 2528.00 2140.00 7675.00 3712.00 1113.60 2598.40 15357.00 31412.00 1113.60 30298.40

Custom Work Cost

Before new machine After new machine Decrease (in $) Decrease (%)

Hourly Rate Labor Hour Cost $ 55.96 3712.00 $ 207,723.52 $ 57.28 2598.40 $ 148,836.35 $ 58,887.17 28.35%

Current Method After new machine Increase (in Dollars) Increase (%)

Hourly Rate Labor Hour Cost $ 55.96 3712.00 $ 207,723.52 $ 80.66 2598.40 $ 209,585.37 $ 1,861.85 0.90%

Before new machine After new machine Decrease (in Dollars) Decrease (%)

Hourly Rate Labor Hour Cost $ 62.48 3712.00 $ 231,925.76 $ 80.66 2598.40 $ 209,585.37 $ 22,340.39 9.63%

30298.40