19010008

MAC
Mason Auto

QUESTION NUMBER 1
Hourly Rate Products
New Old CARB29 (100) Spare Parts Work for others
Casting £ 63.67 £ 67.20 23 312 678
Grinding £ 57.77 £ 67.20 14 276 542
Machining £ 104.88 £ 67.20 61 1120 2161
Custom Work £ 75.19 £ 67.20 0 0 0
Assembly £ 48.34 £ 67.20 34 0 0
Total
Total Cost (New) £ 10,314.43 £ 153,275.16 £ 301,125.28
Total Cost (Old) £ 8,870.40 £ 114,777.60 £ 227,203.20

Cost Diff (more costs) £1,444.03 £38,497.56 £73,922.08

QUESTION NUMBER 3
Current State New Machine
Labour Cost Overhead Cost Hours Labour Cost Over head Hours
Casting £ 169,882 £ 106,551 2,528 169,882 £ 106,551 2,528
Grinding £ 143,808 £ 90,198 2,140 143,808 £ 90,198 2,140
Machining £ 514,550 £ 322,730 7,657 514,550 £ 322,730 7,657
Custom Work £ 249,446 £ 156,455 3,712 174,612 £ 140,809 2,598
Assembly £ 1,031,990 £ 647,273 15,357 1,031,990 £ 647,273 15,357
Total £ 2,109,677 £ 1,323,206 31,394 £ 2,034,843 £ 1,307,561 30,280

Total Previous Overhead 1,323,206

Hourly Rate £ 67.20

Total Previous Cost £ 3,432,883 Old Custom Work Dept Cost £ 405,901
Total New Cost £ 3,342,403 New Custom Work Dept Cost £ 315,422
Cost Dif (savings) £ 90,479 £ 90,479

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 19010008
MAC
Mason Auto

QUESTION NUMBER 2

The difference in the cost is because even though these components are standard inventory items, but as in the
old system they were also sharing their burden onto custom work department, while their average costs were
lower.

QUESTION NUMBER 4 + 5
Costs/hour Hours Cost Hours (CARB30) Cost (CARB30)
Casting £ 63.67 23 £ 1,464.41 13 £ 827.71
Grinding £ 57.77 14 £ 808.78 10 £ 577.70
Machining £ 104.88 61 £ 6,397.68 17 £ 1,782.96
Custom Work £ 75.19 0 £ - 0 £ -
Assembly £ 48.34 34 £ 1,643.56 35 £ 1,691.90
Total 132 £ 10,314.43 75 £ 4,880.27

Price £ 126.50 Price £ 126.50

Material Costs £ 3,360.00 Material Cost £ 6,720.00
Total Cost £ 13,674.43 Total Cost £ 11,600.27
Cost Per piece £ 136.74 Cost Per piece £ 116.00
Dif (loss per piece) £ 10.24 Dif (Profit per piece) £ 10.50

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