Process

Traditional Transferred Oriented

Material 105,000 105,000
Material-related overhead 6,000 6,000
Labor 36,000 36,000
Production-related overhead 120,000 120,000
Manufacturing Cost 267,000 267,000
Manufacturing Cost (% of Total cost) 73.86% 73.86%
Engineering costs 12,000 6,300 5,700
Tooling costs 22,500 22,500
Administartive costs 60,000 27,000 33,000
Support related costs 94,500 33,300 61,200
Support related costs (% of total cost) 26.14% 9.21% 16.93%
Order processing costs 13,800 13,800
Special component costs 19,500 19,500
Total cost 361,500 361,500
 A
Material 90
Material-related OH 5
Direct Labor 35
Production-Related OH 117
Support related OH 57
Cost of Base Motor (Pre-PROKASTA) 304.00
Material 12.00
Material-related OH 0.70
Direct Labor 4.50
Production-Related OH 15.00
Support related OH 7.40
Cost of all special components (Pre-PROKASTA) 39.60
No. of different types special components per Motor 1
No. of Motors ordered 1
Order processing (13,800,000DM / 65,625 Orders) 210.29
Component handeling (19,500,000DM / 325,000 Special components) 60.00
Total costs 613.89
 B C D E
90 90 90 90
5 5 5 5
35 35 35 35
117 117 117 117
57 57 57 57
304.00 304.00 304.00 304.00
24.00 36.00 60.00 120.00
1.40 2.10 3.50 7.00
9.00 13.50 22.50 45.00
30.00 45.00 75.00 150.00
14.80 22.20 37.00 74.00
79.20 118.80 198.00 396.00
2 3 5 10
1 1 1 1
210.29 210.29 210.29 210.29
120.00 180.00 300.00 600.00
713.49 813.09 1,012.29 1,510.29
 A B
Material 90 90
Material-related OH 5 5
Direct Labor 35 35
Production-Related OH 117 117
Base Motor 247 247
Material 12.00 24.00
Material-related OH 0.70 1.40
Direct Labor 4.50 9.00
Production-Related OH 15.00 30.00
Components 32.20 64.40
Support related OH (94,500,000 total support /
61,200,000 applied) EX. 3 1.54 1.54
Support Overhead (57 + 7.4*No. of different type of
special component*Support related OH) 99.44 110.87
Total cost 378.64 422.27
No. of different types special components per Motor 1 2
No. of Motors ordered 1 1
 C D E
90 90 90
5 5 5
35 35 35
117 117 117
247 247 247
36.00 60.00 120.00
2.10 3.50 7.00
13.50 22.50 45.00
45.00 75.00 150.00
96.60 161.00 322.00

1.54 1.54 1.54

122.29 145.15 202.28

465.89 553.15 771.28
3 5 10
1 1 1
 A B
Material 90 90
Material-related OH 5 5
Direct Labor 35 35
Production-Related OH 117 117
Base Motor 247 247
Material 12.00 24.00
Material-related OH 0.70 1.40
Direct Labor 4.50 9.00
Production-Related OH 15.00 30.00
Components 32.20 64.40
Support related OH (35% of pre-support manufacturing
cost) Page 3 1.35 1.35
Total cost = (Base motor + components) x 1.35 376.92 420.39
No. of different types special components per Motor 1 2
No. of Motors ordered 1 1
Total costs 613.886 713.486
Ratio to traditional 1.63 1.70
 C D E
90 90 90
5 5 5
35 35 35
117 117 117
247 247 247
36.00 60.00 120.00
2.10 3.50 7.00
13.50 22.50 45.00
45.00 75.00 150.00
96.60 161.00 322.00

1.35 1.35 1.35

463.86 550.80 768.15
3 5 10
1 1 1
813.086 1012.286 1510.286
1.75 1.84 1.97
Material
Material-related OH
Direct Labor
Production-Related OH

Support related OH
Cost of Base Motor (Pre-PROKASTA)
Material
Material-related OH
Direct Labor
Production-Related OH

Support related OH
Cost of all special components (Pre-PROKASTA)
No. of different types special components per Motor
No. of Motors ordered
Order processing (13,800,000DM / 65,625 Orders)
Component handeling (19,500,000DM / 325,000 Special components)
Total costs
Cost per Unit
 A A A A
90 90 90 90
5 5 5 5
35 35 35 35
117 117 117 117
247 247 247 247
57 57 57 57
304.00 304.00 304.00 304.00
12.00 12.00 12.00 12.00
0.70 0.70 0.70 0.70
4.50 4.50 4.50 4.50
15.00 15.00 15.00 15.00
32.20 32.20 32.20 32.20
7.40 7.40 7.40 7.40
39.60 39.60 39.60 39.60
1 1 1 1
1 10 20 100
210.29 210.29 210.29 210.29
60.00 600.00 1,200.00 6,000.00
613.89 3,666.69 7,058.69 34,194.69
613.89 366.67 352.93 341.95
 Percentage of
Total Costs
Direct Material 29
Direct Labor 10
Materials-related OH 2
Production-related OH 33

Support-related OH 26
 Burden
Rate

6% of material

35% of pre-
support
manufacturing
cost
 No. of units per order 1 10 20 100
Base Motor 304 304 304 304
Components 118.8 118.8 118.8 118.8
Order processing cost 210 210 210 210
Order processing 210 21 10.5 2.1
Component handeling cost 180 180 180 180
Components handeling 180 18 9 1.8
812.8 461.8 442.3 426.7