Quiz 33: Tijuana Bronze Machining Tbml

Calculate the product cost per unit: Product cost per unit : It is the material cost, labor cost, and the overheads that are incurred on a single unit of the product. The product cost per unit using Exhibit 2 can be calculated using the following spreadsheet: Thus, the unit cost calculated for valves is $37.56 , a pump is $63.12 , and a flow controller is $56.50.

The estimated contribution margin for the three products can be calculated using the following strategy: Contribution margin: It is the difference between the revenue and the variable cost. Referring to the exhibits 1 and 2 the contribution is calculated as below: The contribution for valves is calculated as $37.76 , for pumps it is $53.21 and flow controller is $68.19.

Calculate the revised product costs using the following spreadsheet: The revised standard costs for valves, pumps and flow controllers are calculated as and , respectively.