Lead timeSound Tek Inc. manufactures electronic stereo equipment. Themanufacturing process includes printed circuit (PC) board assembly,final assembly, testing, and shipping. In the PC board assemblyoperation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator isresponsible for soldering components according to a given set ofinstructions. Operators work on batches of 45 printed circuit boards.Each board requires 5 minutes of board assembly time. After each batchis completed, the operator moves die assembled boards to the finalassembly area. This move takes 10 minutes to complete. The final assembly for each stereo unit requires 15 minutes and is alsodone in batches of 45 units. A batch of 45 stereos is moved into the testbuilding, which is across the street. The move takes 20 minutes. Beforeconducting the test, the test equipment must be set up for the particularstereo model. The test setup requires 25 minutes. The units wait whilethe setup is performed. In the final test, the 45-unit batch is tested one at a time, Each lest requires 9 minutes. The completed batch, after alltesting, is sent to shipping for packaging and final shipment tocustomers. A complete batch of 45 units is sent from testing to shipping.The Shipping Department is located next to testing. Thus, there is nomove time between these two operations. Packaging and labelingrequires 10 minutes per unit.Instructions 1. Determine the amount of value-added and non-value-added lead timeand the value-added ratio in this process for an average stereo unit in abatch of 45 units. (Round percentages to one decimal place.) Categorizethe non-value-added lime into wait and move time.2. How could this process be improved so as to reduce the amount ofwaste
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Lead time
Sound Tek Inc. manufactures electronic stereo equipment. The
manufacturing process includes printed circuit (PC) board assembly,
final assembly, testing, and shipping. In the PC board assembly
operation, a number of individuals are responsible for assembling
electronic components into printed circuit boards. Each operator is
responsible for soldering components according to a given set of
instructions. Operators work on batches of 45 printed circuit boards.
Each board requires 5 minutes of board assembly time. After each batch
is completed, the operator moves die assembled boards to the final
assembly area. This move takes 10 minutes to complete.
The final assembly for each stereo unit requires 15 minutes and is also
done in batches of 45 units. A batch of 45 stereos is moved into the test
building, which is across the street. The move takes 20 minutes. Before
conducting the test, the test equipment must be set up for the particular
stereo model. The test setup requires 25 minutes. The units wait while
the setup is performed. In the final test, the 45-unit batch is tested one at
a time, Each lest requires 9 minutes. The completed batch, after all
testing, is sent to shipping for packaging and final shipment to
customers. A complete batch of 45 units is sent from testing to shipping.
The Shipping Department is located next to testing. Thus, there is no
move time between these two operations. Packaging and labeling
requires 10 minutes per unit.
Instructions
1. Determine the amount of value-added and non-value-added lead time
and the value-added ratio in this process for an average stereo unit in a
batch of 45 units. (Round percentages to one decimal place.) Categorize
the non-value-added lime into wait and move time.
2. How could this process be improved so as to reduce the amount of
waste
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