Answered: Inspection time 0.5 days Wait time…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 7CE: Golding Bank provided the following data about its resources and activities for its checking account...

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Question

Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported:

Inspection time	0.5	days
Wait time (from order to start of production)	15.5	days
Process time	2.9	days
Move time	1.2	days
Queue time	4.3	days

Required:

1. Compute the throughput time. (Round your answer to 1 decimal place.)

2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.)

3. What percentage of the throughput time was spent in non–value-added activities? (Round your percentage answer to nearest whole percent.)

4. Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.)

5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage answer to 1 decimal place.)

Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order
and when the order is shipped. For the first quarter of operations during the current year the following data were reported:
Inspection time
Wait time (from order to start of production)
Process time
Move time
Queue time
Required:
1. Compute the throughput time. (Round your answer to 1 decimal place.)
2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.)
3. What percentage of the throughput time was spent in non-value-added activities? (Round your percentage answer to nearest
whole percent.)
4. Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.)
5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage
answer to 1 decimal place.)
1. Throughput time
2. Manufacturing cycle efficiency
3. Non-value-added throughput time
0.5 days
15.5 days
2.9 days
1.2 days
4.3 days
4. Delivery cycle time
5. New manufacturing cycle efficiency
days
%
%
days
%

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