Muller Lehmkuhl Gmbh Case Solutions

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Question 3
sales of fasterners total general overhead - machining department - tooling department - machine overhead on attaching machine total general overhead on fasterners production R&D administration marketing shipping commision total sales, general and administration cost on fasterner total fasterner production cost total fasterner production profit 96000 70000 13350 3050 315 53285 3873 2567 7375 2948 3562 20325 73610 22390

sales of attaching machine total general overhead - total general overhead on faster production total general overhead on attaching machine total sales,general and administration cost - sales, general and administration cost on fasterner total sales,general and administration cost on attaching machine total attaching machine cost total attaching machine profit

7000 70000 53285 16715 23500 20325 3175 19890 -12890

Assumption 1. tooling and machining department are dedicated to the production of attaching machines, therefore we deduct these cost from total general overhead cost 2. 93% (= 96/103) sales generated from sale of fasterner, we apply this percentage to estimate the machine overhead, administration , marketing, shipping and commisiion cost 3. the machine overhead on attaching machine is 315 (= 4500 x 0.07) 4. Two-third of current R&D projects was related to fastener production. 5810 x 2/3 = 3873 6. sale of attching machine 7000 (=103,000 - 96,000) 7. since we have already known the general overhead on fastener, we can calculate the cost of sales, general and administration on attaching machine 70000-53285. The same calcuation method applied on calculating the cost of sales, general and administration on attaching machine

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