Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined th he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost Annual holding cost Daily production Annual demand Desired lot size To obtain the desired lot size, the set-up time that should be achieved = $30 per hour $15 per unit 976 units/8 hour day 33,000 (275 days each x daily demand of 120 units) 122 units (one hour of production) minutes (round your response to two decimal places).

Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined th he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost Annual holding cost Daily production Annual demand Desired lot size To obtain the desired lot size, the set-up time that should be achieved = $30 per hour $15 per unit 976 units/8 hour day 33,000 (275 days each x daily demand of 120 units) 122 units (one hour of production) minutes (round your response to two decimal places).

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 17E

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Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost Annual holding cost Daily production Annual demand Desired lot size $25 per hour $16 per unit 1,008 units/8 hour day 42,000 (250 days each x daily demand of 168 units) 126 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = ☐ minutes (round your response to two decimal places).
Carol Cagle has a repetitive manufacturing plant producing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. He has therefore determined that he will reduce his component lot sizes. He has developed the following data for one component, the safety chain clip: Setup labor cost $20 per hour Annual holding cost $15 per unit Daily production 976 units/8 hour day Annual demand 36,000 (250 days each×daily demand of 144 units) Desired lot size 122 units (one hour of production) To obtain the desired lot size, the set-up time that should be achieved = nothing minutes (round your response to two decimal places).
A company is analyzing a make-versus-purchase situation for a component used in several products and the engineering department has developed these data: Option A: Purchase 10,000 items per year at a fixed cost of Php 340 per item. The cost of placing the order is negligible according to the present cost accounting procedure. Option B: Manufacture 10,000 items per year, using available capacity in the factory. Cost estimates are direct materials= Php 200 per item and direct labor = Php 60 per item. Manufacturing overhead is allocated at 200% of direct labor. Based on these data, should the item be purchased or manufacture?
A company is analyzing a make-versus-purchase situation for a component used in several products, and the engineering department has developed these data:Option A: Purchase 10,000 items per year at a fixed price of $8.50 per item. The cost of placing the order is negligible according to the present cost accounting procedure. Option B: Manufacture 10,000 items per year, using available capacity in the factory. Cost estimates are direct materials = $5.00 per item and direct labor = $1.50 per item. Manufacturing overhead is $3.00 per item. Based on these data, should the item be purchased or manufactured?
A new product is being designed by an engineering team at Golem Security. Several managers and employees from the cost accounting department and the marketing department are also on the team to evaluate the product and determine the cost using a target costing methodology. An analysis of similar products on the market suggests a price of $132.00 per unit. The company requires a profit of 0.20 of selling price. How much is the target cost per unit? Round to two decimal places.
The F Inc.’s materials manager is considering the installation of a just-in-time (JIT) inventory system for L-20, one of the chemicals used in the production process. Currently, the chemical is purchased for $30 each pound. The firm uses 4,800 pounds L-20 per year. The controller estimates that it costs $150 to place and receive a typical order of L-20. The annual cost of storing L-20 is $1 per pound. F Inc.’s manufacturing engineering team identifies the following effects of adopting a JIT inventory system: 1) F Inc. will order 100 pounds L-20 each time. 2) The cost of placing an order for L-20 will be reduced to $20. 3) Suppliers would add $4 to the price per pound for frequent deliveries. 4) Currently there is a defect-assessment cost of $120,000 per year. This cost is expected a reduction of 20% under the JIT system. F Inc. requires a 10% annual rate of return on investment Required: From a financial perspective, determine whether it is in the best interest of F to…
Company XYZ is conducting an engineering economic analysis to decide whether to make vs purchase position for a necessary element needed ins several products. Now the engineering department has established this information: Option A to purchase 10,000 units annually at a fixed price of $8.50 per unit. The cost of placing the order is insignificant as per the present cost accounting procedure. Option B to manufacture 10,000 units annually with a direct labor cost of $1.50 per unit, manufacturing overhead cost is allotted at 200% of direct labor (which is $3.00 per unit) ) and Direct materials cost at $5.00 per unit. Based on the information, should the unit be purchased or manufactured?
Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: Annualized Fixed Cost Variable Costs (per unit) ($) Process Type of Plant & Equipment Labor Material Energy Mass Customization $1,260,000 30 18 12 Intermittent $1,000,000 24 26 20 Repetitive $1.720.000 28 15 12 Continuous $2,100,000 25 15 10 Metters Cabinets projects an annual demand of 60,000 units for the Maxistand. The selling price for the Maxistand is $120 per unit. a) Based on the projected annual demand, the best alternative available is to use the Mass Customization process. b) The value of annual profit using this method is $. (Enter your response as an integer.)
The manager of a regional warehouse must decide on the number of loading docks to request for a new facility in order to minimize the sum of dock costs and driver-truck costs. The manager has learned that each driver-truck combination represents a cost of $205 per day and that each dock plus loading crew represents a cost of $1,118 per day. Use Table 18.4. a. How many docks should be requested if trucks arrive at the rate of four per day, each dock can handle five trucks per day, and both rates are Poisson? Number of dock(s) b. An employee has proposed adding new equipment that would speed up the loading rate to 5.71 trucks per day. The equipment would cost an additional $100 per day for each dock. What is the lowest daily total cost that can be achieved with the new equipment? (Round your cost amount to 2 decimal places and all other calculations to 3 decimal places.) The daily total cost with the new equipment is
Rooney Company is considering adding a new product. The cost accountant has provided the following data: Expected variable cost of manufacturing $ 49 per unit Expected annual fixed manufacturing costs $ 68,000 The administrative vice president has provided the following estimates: Expected sales commission $ 3 per unit Expected annual fixed administrative costs $ 52,000 The manager has decided that any new product must at least break even in the first year. Required Use the equation method and consider each requirement separately. If the sales price is set at $67, how many units must Rooney sell to break even? Rooney estimates that sales will probably be 10,000 units. What sales price per unit will allow the company to break even? Rooney has decided to advertise the product heavily and has set the sales price at $72. If sales are 7,000 units, how much can the company spend on advertising and still break even?
Assume that the operations manager of a small semi-conductor manufacturer wants to run a Simulation model to better understand the uncertainties related to cost and demand for a particular product. He assumes that the total cost per month could be anywhere between $150,000 and $200,000 with equal likelihood. He also assumes that the demand is normally distributed with a mean of 5,000 items per month and a standard deviation of 1,000. Each item is sold for $95. a) Use the random numbers in the following table to simulate the costs, revenues and profits per month. Use Random Number A to generate the costs and Random Number B to generate the revenues per month and then calculate the profit as the difference between revenues and costs. Complete the table by reporting the minimum, maximum and average profit per month according to this simulation. Trial 1 2 3 4 5 6 7 8 9 10 you b) Can Random A 0.23 you 0.04 0.14 0.07 0.03 0.67 0.26 0.03 0.83 0.32 Cost Random B 0.75 0.89 0.82 0.33 0.96 0.67…
Jet skis and snowmobiles are assembled by Mobile Incorporated. Because both end-items use the same small engine, you can aggregate demand for the engine assembly. Develop an aggregate plan that uses a level production strategy each quarter and the information that follows. What is the total cost? Assume lost sales are backordered and filled during the next quarter. Summarize the plan, its costs, and consequences using manual computations. Initial Inventory Level 1,000 units Regular Time = $15 Lost Sales Cost/Unit = $24 Inventory Carry Cost per unit $3 Beginning Inventory Quarter 1 2 Totals 10,000 15,000 16,000 3,000 44,000 600 Jet Ski Engine Snowmobile Engine Total Engines Average Demand Rate/Quarter Regular Time Production Rate 400 7,000 19,000 19,000 22,000 35,000 22,000 units 9,000 10,000 45,000 13,000 89,000 1,000 22,000 units