Seemore Company manufactures binoculars
by | Mar 18, 2020 | Uncategorized
Seemore Company manufactures binoculars. The actual costs for 2013 and 2014 were as follows:
|
2013 |
|
2014 |
|
| Direct materials: |
|
|
|
|
|
Plastic case |
$ 8.00 |
|
$ 7.60 |
|
|
Lens set |
34.00 |
|
34.40 |
|
| Direct labor |
64.00 |
(1.6 hours) |
60.00 |
(1.5 hours) |
| Indirect manufacturing costs: |
|
|
|
|
|
Variable |
16.00 |
|
14.20 |
|
|
Fixed |
4.00 |
(100,000 units) |
3.80 |
(120,000 units) |
Beginning in 2014, Seemore implemented a continuous improvement program that required a first-year cost reduction target of a 7 percent reduction of the 2013 base.
Seemore’s continuous improvement target for direct labor in 2014 was:
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