Oakwood Company produces maple bookcases. The following information is available for the production of a recent order of 500 bookcases. Process time 6.0 days Inspection time 0.8 days Move time 3.2 days Wait time 5.0 days 1. Compute the company’s manufacturing cycle time. 2. Compute the company’s manufacturing cycle efficiency. 3. Management believes it can reduce move time by 1.2 days and wait time by 2.8 days by adopting lean manufacturing techniques. Compute the company’s cycle efficiency assuming the company’s predictions are correct.
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.
Oakwood Company produces maple bookcases. The following information is available for the production
of a recent order of 500 bookcases.
Process time 6.0 days
Inspection time 0.8 days
Move time 3.2 days
Wait time 5.0 days
1. Compute the company’s manufacturing cycle time.
2. Compute the company’s manufacturing cycle efficiency.
3. Management believes it can reduce move time by 1.2 days and wait time by 2.8 days by adopting lean
manufacturing techniques. Compute the company’s cycle efficiency assuming the company’s predictions
are correct.
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