Assume that a company has recently switched to JIT manufacturing. Each manufacturing cell produces a single product or major subassembly. Cell workers have been trained to perform a variety of tasks. Additionally, many services have been decentralized. Costs are assigned to products using direct tracing, driver tracing, and allocation. For each cost listed, indicate the most likely product cost assignment method used before JIT and after JIT. Set up a table with three columns: Cost Item, Before JIT, and After JIT. You may assume that direct tracing is used whenever possible, followed by driver tracing, with allocation being the method of last resort. Inspection costs Power to heat, light, and cool plant Minor repairs on production equipment Salary of production supervisor (department/cell) Oil to lubricate machinery Salary of plant supervisor Costs to set up machinery Salaries of janitors Power to operate production equipment Taxes on plant and equipment Depreciation on production equipment Raw materials Salary of industrial engineer Parts for machinery Pencils and paper clips for production supervisor (department/cell) Insurance on plant and equipment Overtime wages for cell workers Plant depreciation Materials handling Preventive maintenance   Use the table below for your answer: DA = Direct attribution (tracing) DT = Driver tracing AL = Allocation     cost item before JIT after JIT

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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Assume that a company has recently switched to JIT manufacturing. Each manufacturing cell produces a single product or major subassembly. Cell workers have been trained to perform a variety of tasks. Additionally, many services have been decentralized. Costs are assigned to products using direct tracing, driver tracing, and allocation. For each cost listed, indicate the most likely product cost assignment method used before JIT and after JIT. Set up a table with three columns: Cost Item, Before JIT, and After JIT. You may assume that direct tracing is used whenever possible, followed by driver tracing, with allocation being the method of last resort.

Inspection costs

Power to heat, light, and cool plant

Minor repairs on production equipment

Salary of production supervisor (department/cell)

Oil to lubricate machinery

Salary of plant supervisor

Costs to set up machinery

Salaries of janitors

Power to operate production equipment

Taxes on plant and equipment

Depreciation on production equipment

Raw materials

Salary of industrial engineer

Parts for machinery

Pencils and paper clips for production supervisor (department/cell)

Insurance on plant and equipment

Overtime wages for cell workers

Plant depreciation

Materials handling

Preventive maintenance

 

Use the table below for your answer:

DA = Direct attribution (tracing)

DT = Driver tracing

AL = Allocation

 

 

cost item before JIT after JIT
     
     
     
     
     
     
     
     
     

 

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