Herfy Foods Incorporated is now one of the biggest manufacturers of buns in the Philippines. Though their operations just started last 2010, they already have significant increase in sales. But, despite their success, the management is still bothered with their losses in terms of product spoilage. Upon investigation, the main reason of spoilage is due to finished goods left unpacked. Your team was asked by the management to create a solutionto be able to minimize the losses in terms of spoilage. Further investigation suggests that the labor capacity is insufficient versus the forecasted demand. Based on the management, there is no existing production plan format. Refer on the below data: Historical Data for 2020 2020 Demand Spoilage (Units) Jan 20,500 2, 750 Cost per bun 10 php Feb 19,500 2,250 Labor cost per day 350 php 5 pax 150 units per day Mar 18,000 1,500 Packing incharge Apr May 20,500 2, 750 Capacity per pax 19,200 2,100 Jun 19,000 2,000 Jul 20,000 20,800 2,500 2,900 Aug Sep 22,000 3,500 Oct 20,500 2, 750 Nov 24,000 4,500 5,000 Dec 25,000 Prepare a production plan for 2021

Herfy Foods Incorporated is now one of the biggest manufacturers of buns in the Philippines. Though their operations just started last 2010, they already have significant increase in sales. But, despite their success, the management is still bothered with their losses in terms of product spoilage. Upon investigation, the main reason of spoilage is due to finished goods left unpacked. Your team was asked by the management to create a solutionto be able to minimize the losses in terms of spoilage. Further investigation suggests that the labor capacity is insufficient versus the forecasted demand. Based on the management, there is no existing production plan format. Refer on the below data: Historical Data for 2020 2020 Demand Spoilage (Units) Jan 20,500 2, 750 Cost per bun 10 php Feb 19,500 2,250 Labor cost per day 350 php 5 pax 150 units per day Mar 18,000 1,500 Packing incharge Apr May 20,500 2, 750 Capacity per pax 19,200 2,100 Jun 19,000 2,000 Jul 20,000 20,800 2,500 2,900 Aug Sep 22,000 3,500 Oct 20,500 2, 750 Nov 24,000 4,500 5,000 Dec 25,000 Prepare a production plan for 2021

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 7E: Rachel Boyce, president of a company that manufactures electronic components, has a number of...

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6) Harriet has been reviewing the accounting system for her company and she is very concerned about the accounting for spoilage. It appears that spoilage is accounted for only at the end of the processing cycle. While this concept is acceptable in general, Harriet believes that a better method can be found to properly account for the spoilage when it occurs. She believes that there must be something better than the weighted-average method of accounting for spoilage. She would like the company to use a method that provides closer tracking of the spoilage with the accounting for the spoilage.Required:Discuss the problems Harriet is having with the accounting system.
Howard Rockness was worried. His company, Rockness Bottling, showed declining profits over the past several years despite an increase in revenues. With profits declining and revenues increasing, Rockness knew there must be a problem with costs. Rockness sent an e-mail to his executive team under the subject heading, “How do we get Rockness Bottling back on track?” Meeting in Rockness’s spacious office, the team began brainstorming solutions to the declining profits problem. Some members of the team wanted to add products. (These were marketing people.) Some wanted to fire the least efficient workers. (These were finance people.) Some wanted to empower the workers. (These people worked in the human resources department.) And some people wanted to install a new computer system. (It should be obvious who these people were.) Rockness listened patiently. When all participants had made their cases, Rockness said, “We made money when we were a smaller, simpler company. We have grown, added…
Howard Rockness was worried. His company, Rockness Bottling, showed declining profits over the past several years despite an increase in revenues. With profits declining and revenues increasing, Rockness knew there must be a problem with costs. Rockness sent an e-mail to his executive team under the subject heading, “How do we get Rockness Bottling back on track?” Meeting in Rockness’s spacious office, the team began brainstorming solutions to the declining profits problem. Some members of the team wanted to add products. (These were marketing people.) Some wanted to fire the least efficient workers. (These were finance people.) Some wanted to empower the workers. (These people worked in the human resources department.) And some people wanted to install a new computer system. (It should be obvious who these people were.) Rockness listened patiently. When all participants had made their cases, Rockness said, “We made money when we were a smaller, simpler company. We have grown,…
ABC Corporation has recently completed a project to reduce total production costs by 5%. Net income has risen as a result, but the stock price has suffered from recent public disclosures about faulty products. The vice president for manufacturing and the controller are concerned that their successful cost-cutting efforts have resulted in lower market valuation. They are beginning to understand that product quality has a cost component and they have asked you, a CMA, to explain the concept of “cost of quality'" to them. A. Define, categorize, and give examples of the "cost of quality." B. What is value chain analysis and how could this impact the company's evaluation of costs? C. What other business process improvement tools may benefit the company?
Based on the 2015 survey, Amanda Westerly believed that Osborn had to improve product quality. In making her case to Osborn management, how might Westerly have estimated the opportunity cost of not implementing the quality-improvement program?
The problem statement here is that in recent months, the cost accounting reports have been somewhat disturbing to management. It seems that some of the finished products are costing more than they should, even to the point of approaching their retail value. It has been noted by the accounting manager that this problem began when the company started buying ore from different parts of the world, some of which require difficult extraction methods. Explain how the company might change its accounting system to reflect the reporting problems better.
Day Street Deli’s owner is disturbed by the poor profit performance of his ice cream counter.He has prepared the following profit analysis for the year just ended: he owner is thinking the elimination of this counter. If it is eliminated then: ✓ Depreciation of counter equipment is avoidable ✓ The supervisory salaries is avoidable✓ The insurance expense is unavoidable ✓ The depreciation of building unavoidable ✓ The general overhead is unavoidable Required:a) Should the company eliminate the counter or not? Show your calculations and justify your answer.b) Mention at least three relevant costs.
Bill Christensen, the production manager, was grumbling about the new quality cost system the plant controller wanted to put into place. If we start trying to track every bit of spoiled material, well never get any work done. Everybody knows when they ruin something. Why bother to keep track? This is a waste of time. Besides, this isnt the first time scrap reduction has been emphasized. You tell my workers to reduce scrap, and Ill guarantee it will go away, but not in the way you would like. Required: 1. Why do you suppose that the controller wants a written record of spoiled material? If everybody knows what the spoilage rate is, what benefits can come from keeping a written record? 2. Now consider Bill Christensens position. In what way(s) could he be correct? What did he mean by his remark concerning scrap reduction? Can this be avoided? Explain.
A company spent P10,000.00 in training its employees to use the new online Accounting System. The system turns out to be heavily unreliable and cannot be used with the current recording standards. The management wants to discontinue the use of the new system. The P10,000.00 spent to train the employees is a: Omarginal cost discretionary cost sunk cost opportunity cost
Ellie Ice-cream’s owner is disturbed by the poor profit performance of his ice cream counter. He has prepared the following profit analyses for the year just ended: The owner is thinking the elimination of this counter. If it is eliminated then:  Depreciation of counter equipment is avoidable  The supervisory salaries is avoidable The insurance expense is unavoidable  The depreciation of building unavoidable  The general overhead is unavoidable Required:a) Should the company eliminate the counter or not? Fill in the table and justify your answer. b) Mention at least three relevant costs.
4. Premier Baking Ltd. Has recently appointed a new CEO to run it bakery business, which supplies to supermarkets. The new CEOs has instituted a new compensation policy and dropped the carlier incentives seheme, which was based on overall production achieved within the targeted time limits and quality standards. The quality control manager has now reported that there is a significant increase in production delays and delivery mix up leading to an increasing number of customer complaints, Explain how the delays and delivery errors could represent a case of agency costs. How could Premier Bakery counter these agency cost?
Please help answer attached question, thank you!