1a.
Introduction: Throughput time is the total time required for the completion of a process. For instance, the time required to manufacture machinery from the beginning till its end is the throughput time. The throughput time comprises process time, inspection time, move time, and queue time. Wait time is not a part of throughput time.
The throughput time for each month.
2a.
Introduction: The various quality control measures that result in a positive direction will help in improving the company’s performance. For instance, testing the units produced and determining if they are within the defined set of quality criteria.
To identify: The areas in which the company seems to be improving. +
3a.
Introduction: Throughput time is the elapsed time from the time of inception of the production process till the goods are dispatched to the customer. The manufacturing cycle refers to the amount of time in the manufacturing process that is spent on enriching or improving the product.
The throughput time and MCE for Month 5.
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MANAGERIAL ACCOUNTING F/MGRS.
- Suspicious Acquisition of Data, Ethical Issues Bill Lewis, manager of the Thomas Electronics Division, called a meeting with his controller, Brindon Peterson, and his marketing manager, Patty Fritz. The following is a transcript of the conversation that took place during the meeting: Bill: Brindon, the variable costing system that you developed has proved to be a big plus for our division. Our success in winning bids has increased, and as a result our revenues have increased by 25%. However, if we intend to meet this years profit targets, we are going to need something extraam I right, Patty? Patty: Absolutely. While we have been able to win more bids, we still are losing too many, particularly to our major competitor, Kilborn Electronics. If we knew more about their bidding strategy, we could be more successful at competing with them. Brindon: Would knowing their variable costs help? Patty: Certainly. It would give me their minimum price. With that knowledge, Im sure that we could find a way to beat them on several jobs, particularly on those jobs where we are at least as efficient. It would also help us to identify where we are not cost competitive. With this information, we might be able to find ways to increase our efficiency. Brindon: Well, I have good news. Ive been talking with Carl Penobscot, Kilborns assistant controller. Carl doesnt feel appreciated by Kilborn and wants to make a change. He could easily fit into our team here. Plus, Carl has been preparing for a job switch by quietly copying Kilborns accounting files and records. Hes already given me some data that reveal bids that Kilborn made on several jobs. If we can come to a satisfactory agreement with Carl, hell bring the rest of the information with him. Well easily be able to figure out Kilborns prospective bids and find ways to beat them. Besides, I could use another accountant on my staff. Bill, would you authorize my immediate hiring of Carl with a favorable compensation package? Bill: I know that you need more staff, Brindon, but is this the right thing to do? It sounds like Carl is stealing those files, and surely Kilborn considers this information confidential. I have real ethical and legal concerns about this. Why dont we meet with Laurie, our attorney, and determine any legal problems? Required: 1. Is Carls behavior ethical? What would Kilborn think? 2. Is Bill correct in supposing that there are ethical and/or legal problems involved with the hiring of Carl? (Reread the section on corporate codes of conduct in Chapter 1.) What would you do if you were Bill? Explain.arrow_forwardI need help with this one please thank youarrow_forwardRequired Information [The following information applies to the questions displayed below.] McKeoun Enterprises is a large machine tool company now experiencing alarming increases in maintenance expense in each of its four production departments. Maintenance costs are currently allocated to the production departments on the basis of direct labor hours incurred in the production department. To provide pressure for the production departments to use less maintenance, and to provide an incentive for the maintenance department to become more efficient, McKeoun has decided to investigate new methods of allocating maintenance costs. One suggestion now being evaluated is a form of outsourcing. The producing departments could purchase maintenance service from an outside supplier. That is, they could choose elther to use an outside supplier of maintenance or to be charged an amount based on their use of direct labor hours. The following table shows the direct labor hours in each department, the…arrow_forward
- Pareto Chart and Cost of Quality Report for a Manufacturing Company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The result of the activity analysis is summarized as follows: Activities Activity Cost Correcting invoice errors $11,250 Disposing of incoming materials with poor quality 9,000 Disposing of scrap 31,500 Expediting late production 27,000 Final inspection 22,500 Inspecting incoming materials 4,500 Inspecting work in process 22,500 Preventive machine maintenance 15,750 Producing product 67,500 Responding to customer quality complaints 13,500 Total $225,000 The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Required: 1. On paper or in a spreadsheet program, prepare a Pareto chart for each of the…arrow_forwardAt the end of Year 1, Cardigan Corporation implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of Year 2, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows: Year 1 Year 2 Output 20,000 24,000 Output prices $10 $10 Change in profits $22,200 Profit-linked measurements: Materials $7,200 Labor 10,500 Power (1,500) What is the price-recovery component? a. $6,000 b. $(6,000) c. $22,200 d. $16,200arrow_forwardProblem: Ethics in Business Lisa Ronsin had recently been transferred to the Home Security Systems Division of National Home Products. Shortly after taking over her new position as divisional controller, she was asked to develop the division’s predetermined overhead rate for the upcoming year. The accuracy of the rate is important because it is usedthroughout the year and any underapplied or overapplied overhead is closed out to Cost of Goods Sold at the end of the year. National Home Products uses direct labor- hours in all of its divisions as the allocation base formanufacturing overhead. To compute the predetermined overhead rate, Lisa divided her estimate of the total manufacturing overhead for the coming year by the production manager’s estimate of the total direct labor-hours for the coming year. She took her computations to the division’s general manager for approval but was quite surprised when he suggested amodification in the base. Her conversation with the general manager…arrow_forward
- In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Last Year Inspection $ 765 $ 1,584 $ 540 $ 675 $630 $ 225 $ 1,260 $ 1,620 $O $ 225 $ 1,710 $ 1,170 $ 45 $ 81 $ 630 $ 900 $ 4,140 $ 1,260 $ 540 $ 1,530 $ 900 $ 1,440 $ 2,700 $ 990 Disposal of production defects $ 900 $ 900 Sales have been flat over the past few years, at $90,000,000 per year. Required: 1. Prepare a quality cost report for this year and last year. Quality engineering Depreciation of test equipment Rework labor Costs (in thousands) This Year Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recallsarrow_forwardIn response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Costs (in thousands) Last Year This Year $ 660 $ 1,215 $ 300 $ 600 $ 300 $ 225 $ 900 $ 0 $ 300 $ 1,200 $ 30 $ 1,500 $ 1,050 $ 60 $ 750 Net cost of scrap Product testing ces Product recalls Disposal of defective products $ 900 $ 3,375 $ 450 $ 1,110 $ 2,625 $ 1,350 $ 900 $ 1,350 $ 750 $ 750 $ 750 Sales have been flat over the past few years, at $75,000,000 per…arrow_forwardIn response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of defective products Costs (in thousands) Last Year This Year $ 1,092 $ 42 $ 840 $ 1,218 $ 420 $ 630 $ 630 $ 420 $ 1,260 $ 0 $ 1,680 $ 210 $ 1,260 $ 42 $ 840 $ 840 $ 1,344 $ 420 $ 1,008 $ 2,100 $ 1,260 $ 1,260 $ 924 $ 840 $ 840 $ 3,780 Sales have been flat over the past few years, at $84,000,000 per…arrow_forward
- 10.2 Explain how independent performance evaluation procedures are either violated or ef- fectively applied in each of the following situations. Identify the problem and suggest the check required (or applied) to prevent the identified problem from occurring. a. The manager who oversees the corporate fleet vehicles signed off on the purchase of 15 luxury SUVs to expand the company's fleet of cars. As soon as this was done, he instructed that the payment be made. b. At a newly opened local restaurant, waiters work six-hour shifts. There are three six- hour shifts per day, with each shift overlapping the next. The restaurant currently has two cash registers and these can be operated by any one of the waiters during a shift without them requiring any form of identification. The new manager has decided that the cash in the cash register box will be checked once every 24 hours, i.e., in the mornings before the new shift for the day begins. c. A company's financial clerk does a spot check of…arrow_forwardThe president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The activity analysis revealed the following: Activities Activity Cost Correcting invoice errors $8,500 Disposing of income materials with poor quality 16,000 Disposing of scrap 28,500 Expediting late production 21,500 Final inspection 19,000 Inspecting incoming materials 5,000 Inspecting work in process 25,000 Preventive machine maintenance 15,000 Producing product 95,500 Responding to customer quality complaints 15,000 Total 249,000 The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Prepare a Pareto chart of the company activities. Classify the activities into prevention, appraisal, internal failure,…arrow_forwardHi, I am just wondering what the work would look like and what the answer to this question would be.Thank youarrow_forward
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