Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 15, Problem 10E
Shorts Manufacturing, Inc., has implemented lean manufacturing in its Kansas City plant as a pilot program. One of its value streams produces a family of small electric tools. The value-stream team managers were quite excited about the results, as some of their efforts to eliminate waste were proving to be effective. During the most recent three weeks, the following data pertaining to the electric tool value stream were collected:
Week 1:
Demand = 90 units @ $40
Beginning inventory = 10 units @ $20 ($5 materials and $15 conversion)
Production = 90 units using $450 of material and $1,350 of conversion cost
Week 2:
Demand = 100 units @ $40
Beginning inventory = 10 units @ $20 ($5 materials and $15 conversion)
Production = 90 units using $450 of material and $1,350 of conversion cost
Week 3:
Demand = 90 units @ $40
Beginning inventory = 0
Production = 100 units using $500 of material and $1,500 of conversion cost
Required:
- 1. Prepare a traditional income statement for each week.
- 2. Calculate the average value-stream product cost for each week. What does this cost signal, if anything?
- 3. Prepare a value-stream income statement for each week. Assume that any increase in inventory is valued at average cost. Comment on the financial performance of the value stream and its relationship to traditional income measurement.
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Shorts Manufacturing, Inc., has implemented lean manufacturing in its Kansas City plant as a pilot program. One of its value streams produces a family of small electric tools. The value-stream team managers were quite excited about the results, as some of their efforts to eliminate waste were proving to be effective. During the most recent three weeks, the following data pertaining to the electric tool value stream were collected:
Week l:
Demand
= 90 units @ $40
Beginning inventory
= 10 units @ $20 ($5 materials and $15 conversion)
Production
= 90 units using $450 of materials and $1,350 of conversion cost
Week 2:
Demand
= 100 units @ $40
Beginning inventory
= 10 units @ $20 ($5 materials and $15 conversion)
Production
= 90 units using $450 of materials and $1,350 of conversion cost
Week 3:
Demand
= 90 units @ $40
Beginning inventory
= 0
Production
= 100 units using $500 of materials and $1,500 of conversion cost
Required:
1.…
Oakwood Company produces maple bookcases. The following information is available for the production of a recent order of 500
bookcases.
Process time
Inspection time
Move time
Wait time
1. Compute cycle time.
2. Compute cycle efficiency.
19 days
1 day
4 days
17 days
3. Management believes it can reduce move time by 1 day and wait time by 2 days by adopting lean manufacturing techniques.
Compute cycle efficiency assuming the predictions are correct.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute cycle time.
Inspection time
Move time
Process time
Wait time
Cycle time
Cycle Time
Required 3
Time
0
(A SEPARATE QUESTION)
The Cnork Creations Company produces small plastic dolls in its Rilto manufacturing
plant. The company is currently evaluating ways to improve productivity. The
accountant of the firm's parent organization suggested that management implement a
new compensation plan based on throughput performance measure as an incentive to
increase productivity. To demonstrate how such a measure might work, the accountant
gathered the following production data for a recent month:
Total units attempted
6,000,000
Good units manufactured
4,800,000
Processing time (total hours)
800
Value-added processing time
600
2.
How many defective units were produced?
Chapter 15 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 15 - Prob. 1DQCh. 15 - What are the five principles of lean thinking?Ch. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - Explain how lean manufacturing is able to produce...Ch. 15 - What role does a demand-pull system have on lean...Ch. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - What is the purpose of assigning facility costs to...Ch. 15 - Why are units shipped used to calculate the...
Ch. 15 - When will the average unit cost be useful for...Ch. 15 - Explain why changes in value-stream profitability...Ch. 15 - Prob. 13DQCh. 15 - Prob. 14DQCh. 15 - What is productivity measurement?Ch. 15 - Prob. 16DQCh. 15 - Prob. 17DQCh. 15 - Discuss the advantages and disadvantages of...Ch. 15 - Prob. 19DQCh. 15 - Prob. 20DQCh. 15 - What is profit-linked productivity measurement and...Ch. 15 - Prob. 22DQCh. 15 - What is the price-recovery component?Ch. 15 - Anderson Company has the following departmental...Ch. 15 - During the week of June 12, Harrison Manufacturing...Ch. 15 - In 20x2, Choctaw Company implements a new process...Ch. 15 - Refer to Cornerstone Exercise 15.3. Choctaw...Ch. 15 - Prob. 5ECh. 15 - Bienestar Inc., has the following departmental...Ch. 15 - Bienestar, Inc., implemented cellular...Ch. 15 - Henderson, Inc., has just created five order...Ch. 15 - Prob. 9ECh. 15 - Shorts Manufacturing, Inc., has implemented lean...Ch. 15 - The following Box Scorecard was prepared for a...Ch. 15 - Prob. 12ECh. 15 - Carsen Company produces handcrafted pottery that...Ch. 15 - Helena Company needs to increase its profits and...Ch. 15 - Helena Company needs to increase its profits and...Ch. 15 - Prob. 16ECh. 15 - Lean manufacturing is characterized by all but one...Ch. 15 - Lean manufacturing uses value streams to produce a...Ch. 15 - A manufacturing cell within a value stream is...Ch. 15 - Total productive efficiency is achieved when both...Ch. 15 - The following information is given for a...Ch. 15 - Sixty employees (all CPAs) of a local public...Ch. 15 - Sixty employees (all CPAs) of a local public...Ch. 15 - Bradford Company, a manufacturer of small tools,...Ch. 15 - Continuous improvement is the governing principle...Ch. 15 - Prob. 26PCh. 15 - Jadlow Company produces handcrafted leather...Ch. 15 - Prob. 28P
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