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Lens Care Incorporated (LCI) manufactures specialized equipment for polishing optical lenses. There are two models...

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Accounting

Lens Care Incorporated (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools:PackagingLogged hours$ 20.40 per hourLCI currently sells the B-13 model for $5,825 and the F-32 model for $6,260. Manufacturing costs and activity usage for the two products are as follows:Direct materialsNumber of partsMachine hoursInspection timePackaging timeSetupsB-13$ 165.401788.803.501.804F-32$ 76.321384.382.601.403The profit margin based on manufacturing cost for model B-13 is:Cost PoolsAllocation BaseCosting RateMaterials handlingNumber of parts$ 4.20 per partManufacturing supervisionHours of machine time$ 14.98 per hourAssemblyNumber of parts$ 4.20,per partMachine setupEach setup$ 57.40 per setupInspection and testingLogged hours$ 46.40 per hourMultiple. Choice$3,768.36.$3.601.37.$3,525.77.$3,603.86.$3,624.84.

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