Question: Ralph Containers Co. manufactures custom trays for agriculture and horticulture use. Due to rising costs, management is evaluating its production process to identify areas for efficiency improvement. The table below shows the time required to complete each step in the production of a batch of 2-inch plant trays: Activity Materials moved to production floor Production in station 1 Materials moved to station 2 Wait to begin at station 2 Production in station 2 Inspection Time to Complete 25 minutes 40 minutes 4 minutes 9 minutes 50 minutes 5 minutes Materials moved to finished goods area 7 minutes Required: What is the manufacturing cycle time (throughput time) to produce a batch of 2- inch plant trays and prepare it for sale?

Question: Ralph Containers Co. manufactures custom trays for agriculture and horticulture use. Due to rising costs, management is evaluating its production process to identify areas for efficiency improvement. The table below shows the time required to complete each step in the production of a batch of 2-inch plant trays: Activity Materials moved to production floor Production in station 1 Materials moved to station 2 Wait to begin at station 2 Production in station 2 Inspection Time to Complete 25 minutes 40 minutes 4 minutes 9 minutes 50 minutes 5 minutes Materials moved to finished goods area 7 minutes Required: What is the manufacturing cycle time (throughput time) to produce a batch of 2- inch plant trays and prepare it for sale?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter3: Process Cost Systems

Section: Chapter Questions

Problem 3MAD: Analyzing process cost elements over time Pix Paper Inc. produces photographic paper for printing...

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Analyzing process cost elements over time Pix Paper Inc. produces photographic paper for printing digital images. One of the processes for this operation is a coating (solvent spreading) operation, where chemicals are coated onto paper stock. There has been some concern about the cost performance of this operation. As a result, you have begun an investigation. You first discover that all materials and conversion prices have been stable for the last six months. Thus, increases in prices for inputs are not an explanation for increasing costs. However, you have discovered three possible problems from some of the operating personnel whose quotes follow: Operator 1: Ive been keeping an eye on my operating room instruments. I feel as though our energy consumption is becoming less efficient. Operator 2: Everyone the coating machine goes down, we produce waste on shutdown and subsequent startup. It seems like during the last half-year we have had more unscheduled machine shutdowns than m the past. Thus, I feel as though our yields must be dropping. Operator 3: My sense is that our coating costs are going up It seems to me like we are spreading a thicker coating than we should. Perhaps the coating machine needs to be recalibrated. The Coating Department had no beginning or ending inventories for any month during the study period. The following data from die cost of production report are made available: A. Prepare a table showing the paper cost per output pound, coating cost per output pound, conversion cost per output pound, and yield (pounds transferred out/pounds input) for each month. Round costs to the nearest cent and yield to the nearest whole percent. B. Interpret your table results.
Cost Accounting Give the answer to the problem. What is the answer in numbers 1 and 2? Show solution/process.
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Fisico Company produces exercise bikes. One of its plants produces two versions: a standard model and a deluxe model. The deluxe model has a wider and sturdier base and a variety of electronic gadgets to help the exerciser monitor heartbeat, calories burned, distance traveled, etc. At the beginning of the year, the following data were prepared for this plant: Additionally, the following overhead activity costs are reported: Required: 1. Calculate the cost per unit for each product using direct labor hours to assign all overhead costs. 2. Calculate activity rates and determine the overhead cost per unit. Compare these costs with those calculated using the unit-based method. Which cost is the most accurate? Explain.
Nizam Company produces speaker cabinets. Recently, Nizam switched from a traditional departmental assembly line system to a manufacturing cell in order to produce the cabinets. Suppose that the cabinet manufacturing cell is the cost object. Assume that all or a portion of the following costs must be assigned to the cell: a. Depreciation on electric saws, sanders, and drills used to produce the cabinets b. Power to heat and cool the plant in which the cell is located c. Salary of cell supervisor d. Wood used to produce the cabinet housings e. Maintenance for the cells equipment (provided by the maintenance department) f. Labor used to cut the wood and to assemble the cabinets g. Replacement sanding belts h. Cost of janitorial services for the plant i. Ordering costs for materials used in production j. The salary of the industrial engineer (she spends about 20 percent of her time on work for the cell) k. Cost of maintaining plant and grounds l. Cost of plants personnel office m. Depreciation on the plant n. Plant receptionists salary and benefits Required: Identify which cost assignment method would likely be used to assign the costs of each of the preceding activities to the cabinet manufacturing cell: direct tracing, driver tracing, or allocation. When driver tracing is selected, identify a potential activity driver that could be used for the tracing.
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Assume that at the beginning of 20x2, Cicleta trained the 2 assembly workers in a new approach that had the objective of increasing the efficiency of the assembly process. Cicleta also began moving toward a JIT purchasing and manufacturing system. When JIT is fully implemented, the demand for expediting is expected to be virtually eliminated. It is expected to take two to three years for full implementation. Assume that receiving cost is a step-fixed cost with steps of 1,500 orders. The other three activities employ resources that are acquired as used and needed. At the end of 20x2, the following results were reported for the four activities: Required: 1. Prepare a trend report that shows the non-value-added costs for each activity for 20x1 and 20x2 and the change in costs for the two periods. Discuss the reports implications. 2. Explain the role of activity reduction for receiving and for expediting. What is the expected value of SQ for each activity after JIT is fully implemented? 3. What if at the end of 20x2, the selling price of a competing product is reduced by 27 per unit? Assume that the firm produces and sells 20,000 units of its product and that its product is associated only with the four activities being considered. By virtue of the waste-reduction savings, can the competitors price reduction be matched without reducing the unit profit margin of the product that prevailed at the beginning of the year? If not, how much more waste reduction is needed to achieve this outcome? In this case, what price decision would you recommend?
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