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Lehigh

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Submitted By manisakshi
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Lehigh Steel

1. For each of the five sample products, compute the profitability per pound under the ABC system at Lehigh.

Rate of Expense per activity in the manufacturing process (From Exhibit 6): Activity | Driver | Driver Volume | Amount | Rate | Combined rate | Melting: Depreciation | Melt Machine minutes | 5,145,632 | $ 2,139,865.00 | 0.416 | | Melting: Maintenance | Melt Machine minutes | 5,145,632 | $ 975,130.00 | 0.190 | 1.001 | Melting: Utilities | Melt Machine minutes | 5,145,632 | $ 2,036,477.00 | 0.396 | | Refining: Depreciation | Refine Machine minutes | 5,691,042 | $ 1,711,892.00 | 0.301 | | Refining: Maintenance | Refine Machine minutes | 5,691,042 | $ 780,104.00 | 0.137 | 0.745 | Refining: Utilities | Refine Machine minutes | 5,691,042 | $ 1,745,551.00 | 0.307 | | Molding: Depreciation | Mold Machine minutes | 4,226,965 | $ 427,973.00 | 0.101 | | Molding: Maintenance | Mold Machine minutes | 4,226,965 | $ 390,052.00 | 0.092 | 0.262 | Molding: Utilities | Mold Machine minutes | 4,226,965 | $ 290,025.00 | 0.069 | | Rolling: Depreciation | Roll Machine minutes | 8,258,382 | $ 2,995,811.00 | 0.363 | | Rolling: Maintenance | Roll Machine minutes | 8,258,382 | $ 975,130.00 | 0.118 | 0.587 | Rolling: Utilities | Roll Machine minutes | 8,258,382 | $ 872,776.00 | 0.106 | | Finishing: Depreciation | Finish Machine minutes | 4,057,311 | $ 1,283,919.00 | 0.316 | | Finishing: Maintenance | Finish Machine minutes | 4,057,311 | $ 780,104.00 | 0.192 | 0.724 | Finishing: Utilities | Finish Machine minutes | 4,057,311 | $ 872,776.00 | 0.215 | | General & Administrative | Pounds | 50,299,240 | $ 5,400,955.00 | 0.107 | 0.107 | Material Handling & Setup | Orders |

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