Albany Manufacturing Company

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Option #1: Albany Manufacturing Company

Management has decided to reduce direct material and ordering costs by purchasing sub-assembled components and not individual parts. Using the attached Excel file, you must do the following.


  1. Using the Revised Category Costs tab, make the following changes under ” Changes” Category. Other categories’ costs remain same.
    1. Reduce direct labor rate from $30.00 to $28.00 per unit
    2. Reduce direct labor quantity from 3.00 to 2.65 hours per unit
    3. Reduce receiving and shipping ordering quantity from 100 to 90 units.
    4. Reduce testing and inspection from $2.00 to $1.75 per unit
    5. Reduce rework costs from $20 to $18 per unit
  2. Compute total costs for each category
  3. Complete Revised Cost Information tab
    1. Calculate total costs
    2. Calculate cost per unit for each category, round to two decimal points

Follow the instructions on the Data tab of the worksheet. Show all calculations within the cells of the Excel spreadsheet. This means that you must use formulas and links so that your thought process can be examined. You must also include a detailed explanation of each journal entry that you make or do not make on each date to convey your thought process. There should be no hard coding of solutions.


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