Question#2Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).To make its bulb products, Bright Night requires 55,800 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows:Central Glass Company: $29.00 per pound of glass. Delivery schedule: 55,800 (620 lbs. x 90 days) pounds at the beginning of July to last for 3 months.Ithaca Glass Company: $29.15 per pound of glass. Delivery schedule: 620 pounds per working day (90 days in the quarter).Bright Night accepted Central Glass Company’s bid because it was the low-cost bid.3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Company’s bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.) Round to the nearest cent.$fill in the blank 5 per lb. **Lead Time Analysis for Sound Tek Inc.****Overview:**Sound Tek Inc. specializes in manufacturing electronic stereo equipment. Their production process encompasses several stages, including printed circuit board (PC) assembly, final assembly, testing, and shipping. Here's a detailed breakdown of the process:1. **PC Board Assembly:** - Operators work on batches of 50 printed circuit boards. - Each board requires 4 minutes for assembly. - After completion, a batch is moved to the final assembly, taking 12 minutes.2. **Final Assembly:** - Requires 21 minutes per stereo unit, conducted in batches of 50. - The batch is moved across the street for testing, taking 20 minutes.3. **Testing:** - Setup for testing each stereo model takes 30 minutes. - Testing each unit from the batch takes 11 minutes individually.4. **Shipping:** - No additional move time from testing to shipping. - Packaging and labeling require 11 minutes per unit.**Task:**1. Determine the value-added and non-value-added lead times for a stereo unit, calculating the value-added ratio from these times.**Calculations:**- **Value-added Lead Time:** - Enter the value in minutes.- **Non-value-added Lead Time:** - Wait Time Lead Time: Enter the value (in minutes). - Move Time Lead Time: Enter the value (in minutes). - Calculate Total Non-value-added Lead Time.- **Total Lead Time:** - Sum of value-added and non-value-added lead times.- **Value-added Ratio:** - Calculate this as a percentage, rounding to one decimal place.**Additional Task:**2. Determine how move time in the process could be reduced.**Notes for Educators:**This activity encourages students to engage with real-world manufacturing processes and apply analytical skills to optimize production efficiency. Encourage learners to think critically about where time is spent in the process and how to maximize productive time.

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Question#2 Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days). To make its bulb products, Bright Night requires 55,800 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows: Central Glass Company: $29.00 per pound of glass. Delivery schedule: 55,800 (620 lbs. x 90 days) pounds at the beginning of July to last for 3 months. Ithaca Glass Company: $29.15 per pound of glass. Delivery schedule: 620 pounds per working day (90 days in the quarter). Bright Night accepted Central Glass Company’s bid because it was the low-cost bid. 3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Company’s bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.) Round to the nearest cent. $fill in the blank 5 per lb.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question#2

Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).

To make its bulb products, Bright Night requires 55,800 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows:

Central Glass Company: $29.00 per pound of glass. Delivery schedule: 55,800 (620 lbs. x 90 days) pounds at the beginning of July to last for 3 months.
Ithaca Glass Company: $29.15 per pound of glass. Delivery schedule: 620 pounds per working day (90 days in the quarter).

Bright Night accepted Central Glass Company’s bid because it was the low-cost bid.

3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Company’s bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.) Round to the nearest cent.
$fill in the blank 5 per lb.

**Lead Time Analysis for Sound Tek Inc.**

**Overview:**
Sound Tek Inc. specializes in manufacturing electronic stereo equipment. Their production process encompasses several stages, including printed circuit board (PC) assembly, final assembly, testing, and shipping. Here's a detailed breakdown of the process:

1. **PC Board Assembly:**
- Operators work on batches of 50 printed circuit boards.
- Each board requires 4 minutes for assembly.
- After completion, a batch is moved to the final assembly, taking 12 minutes.

2. **Final Assembly:**
- Requires 21 minutes per stereo unit, conducted in batches of 50.
- The batch is moved across the street for testing, taking 20 minutes.

3. **Testing:**
- Setup for testing each stereo model takes 30 minutes.
- Testing each unit from the batch takes 11 minutes individually.

4. **Shipping:**
- No additional move time from testing to shipping.
- Packaging and labeling require 11 minutes per unit.

**Task:**
1. Determine the value-added and non-value-added lead times for a stereo unit, calculating the value-added ratio from these times.

**Calculations:**

- **Value-added Lead Time:**
- Enter the value in minutes.

- **Non-value-added Lead Time:**
- Wait Time Lead Time: Enter the value (in minutes).
- Move Time Lead Time: Enter the value (in minutes).
- Calculate Total Non-value-added Lead Time.

- **Total Lead Time:**
- Sum of value-added and non-value-added lead times.

- **Value-added Ratio:**
- Calculate this as a percentage, rounding to one decimal place.

**Additional Task:**
2. Determine how move time in the process could be reduced.

**Notes for Educators:**
This activity encourages students to engage with real-world manufacturing processes and apply analytical skills to optimize production efficiency. Encourage learners to think critically about where time is spent in the process and how to maximize productive time.

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