60.1K

Verified Solution

Link Copied!

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:

Cost Pools	Allocation Base	Costing Rate
Materials handling	Number of parts	$ 3.70	per part
Manufacturing supervision	Hours of machine time	$ 14.93	per hour
Assembly	Number of parts	$ 3.95	per part
Machine setup	Each setup	$ 57.15	per setup
Inspection and testing	Logged hours	$ 46.15	per hour
Packaging	Logged hours	$ 20.15	per hour

LCI currently sells the B-13 model for $4,700 and the F-32 model for $4,860. Manufacturing costs and activity usage for the two products are as follows:

	B-13	F-32
Direct materials	$ 165.15	$ 76.12
Number of parts	173	133
Machine hours	8.55	4.33
Inspection time	3.00	2.10
Packaging time	1.55	1.15
Setups	7	6

The market price for B-13 and F-32 are reduced to $4,620 and $4,735 respectively. To achieve the target cost, Lens Care plans to reduce materials handling costs. How many parts must be removed from F-32 in order to achieve the target cost for F-32 (round up to whole units)?

Multiple Choice

48

41

17

33

29

Answer & Explanation Solved by verified expert

See Answer