Luzent Company produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor Dirhams. For 2018, Luzent compiled the following data for the two pr
Luzent Company produces two fashions of beginning doors: Deluxe and Standard. The assignment basis for buttress requires has been plain drudge Dirhams. For 2018, Luzent compiled the subjoined axioms for the two effects: Deluxe Test Sales parts 50,000 400,000 Sales worth per part Dh650.00 Dh475.00 Prime requires per part Dh180.00 Dh130.00 Plain materials require per part Dh95.00 Dh75.00 Plain drudge requires per part Dh75.00 Dh55.00 Manufacturing buttress requires per part Dh 80.00 Dh120.00 Last year, Luzent Manufacturing purchased an requirely robotics order to recognize for over reparatory door effects in the deluxe effect succession. The CFO suggested that an ABC decomposition could be precious to succor evaluate a effect mix and furtherance manoeuvre for the instant sales war. She obtained the subjoined ABC counsel for 2018: Activity Require Driver Require Entirety Deluxe Test Setups of setups Dh 500,000 500 400 100 Machine-related of machine hours Dh44,000,000 600,000 300,000 300,000 Packing of shipments Dh 5,000,000 250,000 50,000 200,000 Required: a. Using the running order, what is the estimated 1. entirety require of manufacturing one part for each fashion of door? 2. emolument per part for each fashion of door? b. Using the running order, estimated manufacturing overhead requires per part are less for the deluxe door (Dh80 per part) than the test door (Dh120 per part). What is a likely interpretation for this? c. “ABC orders may outcome in misallocation of inplain requires.” Do you assent? Give reasons for your response. d. What considerations scarcity to be examined when determining a sales mix manoeuvre? e. While implementing an ABC order for the highest occasion, achieving a expressive qualify overnight is arduous and this may de motivate employees. How can managers overcome this collection?