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mapping of production and clocks times according to table below.

other data:

Annual production 20,000 pcs

Restricted capital for the product's machine equipment SEK 6,500,000

Yield requirement ROCE 10%

calculation model:

a) Use the company's calculation model (surcharge calculation) to calculate a theoretical selling price. Profit in% / unit is calculated from the requirement ROCE 10%

You also need to keep track of the total overheads, excluding profits, for task b.

b) Cost efficiency

You realize that extensive improvement work is required to meet the customer's requirements price reductions and at the same time live up to the owners' return requirements. In improvement groups, work is done to trim the process cycle times, which results in lower direct cost / pc and thus lower overheads in USD and ultimately lower sales price. Of course also larger possible production volume. However, you realize a problem at a higher level, the total mass of "Joint costs / overheads" are sluggish with long depreciation periods for the machine park. How can you think about the distribution of the total overheads in this new situation? Enter at least 2 suggestions. (The product accounts for a large part of your production, and customer total for an even bigger one.)

//please be thorough with answers and show calculation etc, even if it cost more question. thanks in advance.

#OP Operation Operationtime(sec) sidenote Machine and wager cost(dollar/hour) 10 300:-/each 20 240 30 40 Material purchases, forging Casting Casting/threading milling Hardening Cleaning packing 180 360 600 900 830:- 720:- 900:- 800:- 400:- 450:- 50 60 Batch of 50 Batch of 50 70 30 Direct material / pc Material overhead cost +15% (DM+MO) Direct labor cost DL/PC Manufacturing overhead cost + 20% MOC +(DM+MOC) USD (machine and wage cost) Manufacturing cost = MC (DM+MOC) + (DL+MOC) Adm and sales overhead + AFFO 28% Selfcost = SC Profit/pc + P Selling price = SP #OP Operation Operationtime(sec) sidenote Machine and wager cost(dollar/hour) 10 300:-/each 20 240 30 40 Material purchases, forging Casting Casting/threading milling Hardening Cleaning packing 180 360 600 900 830:- 720:- 900:- 800:- 400:- 450:- 50 60 Batch of 50 Batch of 50 70 30 Direct material / pc Material overhead cost +15% (DM+MO) Direct labor cost DL/PC Manufacturing overhead cost + 20% MOC +(DM+MOC) USD (machine and wage cost) Manufacturing cost = MC (DM+MOC) + (DL+MOC) Adm and sales overhead + AFFO 28% Selfcost = SC Profit/pc + P Selling price = SP

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