Minnesota Office Products (in millions)

(after cost analysis by consultant) Supreme Deluxe Regular Total

Direct materials $84 $54 $62 $200
Direct manufacturing labor 14 28 8 50
Direct energy costs 39.8 40.7 9.5 90
Other manufacturing overhead costs 16.8 33.6 9.6 60
Units produced 80 120 100 300
 Beginning End
Canseco Company of 2007 of 2007
Direct materials inventory $22,000 $26,000
Work-in-process inventory 21,000 20,000
Finished goods inventory 18,000 23,000
Purchases of direct materials 75,000
Direct manufacturing labor 25,000
Indirect manufacturing labor 15,000
Plant Insurance 9,000
Depreciation -- plant and building, and equipment 11,000
Repairs and maintenance -- plant 4,000
Marketing, distribution, and customer-service costs 93,000
General and administrative costs 29,000
(in $000s) Westec caused rush order Pinnacle caused rush order Neither caused rush order
Customer Westec Pinnacle Westec Pinnacle Westec Pinnacle
Sales Representative I. Blacklaw G. Benson I. Blacklaw G. Benson I. Blacklaw G. Benson
Revenues $420,000 $460,000 $420,000 $460,000 $420,000 $460,000
Cost of goods sold:
Direct Materials $230,000 $260,000 $230,000 $260,000 $230,000 $260,000
Direct manufacturing labor 40,000 40,000 40,000 40,000 40,000 40,000
Indirect manufacturing labor 80,000 80,000 80,000 80,000 80,000 80,000
Overtime costs 20,000
Total cost of goods sold 370,000
Gross margin 50,000
Bonus earned by salesperson $5,000