Shelby Shelving Accounting Case Study

Shelby Shelving - Current Production Schedule

Machine usage requirements (hours per unit)

Stamping Forming

Model S 0.30 0.25

Model LX 0.30 0.50

Monthly production

Model S 400

Model LX 1400

1900 $1,800

1400 $2,100

Assembly capacity Unit selling price

Available 800 800

Hours spent in departments Stamping Forming

Model S 120 100

Model LX 420 700

Totals 540 800

Percentages of time spent in departments Model S Model LX Stamping 22.2% 77.8% Forming 12.5% 87.5% Monthly overhead cost data

Stamping Forming Model S Assembly Model LX Assembly

Model S Variable $80 $120 $165 $0 $365

Model LX Variable $90 $170 $0 $185 $445

Total Fixed $125,000 $95,000 $80,000 $85,000 $385,000

Standard costs of the shelves (based on the current production levels)

Direct materials Direct labor: Stamping Forming Assembly Total direct labor Overhead allocation Stamping Forming Assembly Total overhead Total cost

Model S $1,000

Model LX $1,200

$35 $60 $80 $175

$35 $90 $85 $210

$149.44 $149.69 $365.00 $664.13 $1,839.13

$159.44 $229.38 $245.71 $634.53 $2,044.53

Microsoft Excel 12.0 Answer Report Worksheet: [Accounting 522_Shelby Shelving.xlsx]Shelby Linear Programming Report Created: 12/3/2014 12:45:49 AM

Target Cell (Max) Cell $C$37 Profit

Name

Original Value $62,000

Adjustable Cells Cell Name Original Value $C$11 Production per month Model S 400 $D$11 Production per month Model LX 1400

Final Value $268,250

$300,000 $250,000

Final Value 1900 650

$200,000 $150,000

Constraints Cell Name $C$18 Forming Hours used $C$17 Stamping Hours used $C$11 Production per month Model S $D$11 Production per month Model LX

$100,000

Cell Value 800 765 1900 650

Formula $C$18