time has been 140 minutes, consisting of the followingsteps:Turn off machine and remove fixture from latheGo to tool room with fixtureRecord replacement of fixture to tool roomReturn to latheClean latheReturn to tool roomRecord withdrawal of new fixture from tool roomReturn to latheInstall new fixture and turn on machineTotal setup time15 minutesb.151820202012155140 minutesa. A company plans to setup a machine to increase theproductivity. The average setup time is 140 minutes. Doyou think the management needs to minimize the setuptime. Identify the reason that supports the answer.a. Yesb. NoReason:a. The setup time is not a concern of the company as it isnot related to productivity of the company.b. The setup time should be considered because longsetup time leads to increased economic cost of thesetup.c. The cost incurred for setup can be ignored as it isrelated to machinery.d. Long setup cost can be recovered as depreciation.A company plans to setup a machine to increase theproductivity. The average setup time is 140 minutes.The company wishes to control the setup time. Identifythe statement that suits the given situation.a. Identify the wait time and non-value-added time andeliminate that with effective planning so that the setuptime can be reduced.b. Identify the machine that has less setup time.c. Identify the laborers are contributing less to the setupprocess and eliminate them from the process.d. None of the above.c. How much time would be required for a setup, usingyour suggestion in (b)?minutes

Setup time is the interval needed to adjust the settings on a machine, so that it is ready to…

time has been 140 minutes, consisting of the following steps: Turn off machine and remove fixture from lathe Go to tool room with fixture Record replacement of fixture to tool room Return to lathe Clean lathe Return to tool room Record withdrawal of new fixture from tool room Return to lathe Install new fixture and turn on machine Total setup time 15 minutes 15 18 Reason: 20 20 20 12 15 5 140 minutes a. A company plans to setup a machine to increase the productivity. The average setup time is 140 minutes. Do you think the management needs to minimize the setup time. Identify the reason that supports the answer. a. Yes b. No

time has been 140 minutes, consisting of the following steps: Turn off machine and remove fixture from lathe Go to tool room with fixture Record replacement of fixture to tool room Return to lathe Clean lathe Return to tool room Record withdrawal of new fixture from tool room Return to lathe Install new fixture and turn on machine Total setup time 15 minutes 15 18 Reason: 20 20 20 12 15 5 140 minutes a. A company plans to setup a machine to increase the productivity. The average setup time is 140 minutes. Do you think the management needs to minimize the setup time. Identify the reason that supports the answer. a. Yes b. No

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 2PA

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Vernon Inc. has analyzed the setup time on its computer-controlled lathe. The setup requireschanging the type of fixture that holds a part. The average setup time has been 140 minutes,consisting of the following steps: Turn off machine and remove fixture from lathe 15 minutesGo to tool room with fixture 15Record replacement of fixture to tool room 18Return to lathe 20Clean lathe 20Return to tool room 20Record withdrawal of new fixture from tool room 12Return to lathe 15Install new fixture and turn on machine 5Total setup time 140 minutesa. Why should management be concerned about improving setup time?b. What do you recommend to Vernon Inc. for improving setup time?c. How much time would be required for a setup, using your suggestion in (b)?
Reduce Setup Time Vernon Inc. has analyzed the setup time on its computer-controlled lathe. The setup requires changing the type of fixture that holds a part. The average setup time has been 140 minutes, consisting of the following steps: Turn off machine and remove fixture from lathe 15 minutes Go to tool room with fixture 15 Record replacement of fixture to tool room 18 Return to lathe 20 Clean lathe 20 Return to tool room 20 Record withdrawal of new fixture from tool room 12 Return to lathe 15 Install new fixture and turn on machine 5 Total setup time 140 minutes a. A company plans to setup a machine to increase the productivity. The average setup time is 140 minutes. Do you think the management needs to minimize the setup time. Identify the reason that supports the answer. Yes No a Reason: The setup time is not a concern of the company as it is not related to productivity of the company. The setup time should be considered because long…
gagenown/ilm/takeAssignment/takeAssignmentMain.do?invoker=&ta... A Q eBook Activity Fabrication Assembly Setup Inspecting Production scheduling Purchasing Activity Rate $24 per machine hour $13 per direct labor hour $50 per setup $28 per inspection $14 per production order $11 per purchase order The activity-base usage quantities and units produced for each product were as follows: Elliptical Machines Treadmill 1,687 419 53 Activity Base Machine hours Direct labor hours Setups Elliptical Machines Treadmill 4 Product Costs using Activity Rates Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: C 101 Print Item % 15 5 732 $ Inspections Production orders Purchase orders 198 Units produced 286 Use the activity rate…
Reduce Setup Time Vernon Inc. has analyzed the setup time on its computer-controlled lathe. The setup requires changing the type of fixture that holds a part. The average setup time has been 140 minutes, consisting of the following steps: Turn off machine and remove fixture from lathe 15 minutes Go to tool room with fixture 15 Record replacement of fixture to tool room 18 Return to lathe 20 Clean lathe 20 Return to tool room 20 Record withdrawal of new fixture from tool room 12 Return to lathe 15 Install new fixture and turn on machine 5 Total setup time 140 minutes a. A company plans to setup a machine to increase the productivity. The average setup time is 140 minutes. Do you think the management needs to minimize the setup time. Identify the reason that supports the answer. Yes No a Reason: The setup time is not a concern of the company as it is not related to productivity of the company. The setup time should be considered because long…
Use the following information for Exercises 5-44 through 5-46: The following six situations at Diviney Manufacturing Inc. are independent. a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is 12, the cost per machine hour is 8, and the cost per pound of materials is 10. b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is 50. c. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is 20. d. Inspection time for a plant is 16,000 hours per year. The cost of inspection consists of salaries of 8 inspectors, totaling 320,000. Inspection also uses supplies costing 5 per inspection hour. The company eliminated most defective components by eliminating low-quality suppliers. The number of production errors was reduced dramatically by installing a system of statistical process control. Further quality improvements were realized by redesigning the products, making them easier to manufacture. The net effect was to achieve a close to zero-defect state and eliminate the need for any inspection activity. e. Each unit of a product requires 6 components. The average number of components is 6.5 due to component failure, requiring rework and extra components. Developing relations with the right suppliers and increasing the quality of the purchased component can reduce the average number of components to 6 components per unit. The cost per component is 500. f. A plant produces 100 different electronic products. Each product requires an average of 8 components that are purchased externally. The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have 4 components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand are 900,000 per year. 5-45 Driver Analysis Refer to the information for Diviney Manufacturing on the previous page. Required: CONCEPTUAL CONNECTION For each situation, identify the possible root cause(s) of the activity cost (such as plant layout, process design, and product design).
Use the following information for Exercises 5-44 through 5-46: The following six situations at Diviney Manufacturing Inc. are independent. a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is 12, the cost per machine hour is 8, and the cost per pound of materials is 10. b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is 50. c. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is 20. d. Inspection time for a plant is 16,000 hours per year. The cost of inspection consists of salaries of 8 inspectors, totaling 320,000. Inspection also uses supplies costing 5 per inspection hour. The company eliminated most defective components by eliminating low-quality suppliers. The number of production errors was reduced dramatically by installing a system of statistical process control. Further quality improvements were realized by redesigning the products, making them easier to manufacture. The net effect was to achieve a close to zero-defect state and eliminate the need for any inspection activity. e. Each unit of a product requires 6 components. The average number of components is 6.5 due to component failure, requiring rework and extra components. Developing relations with the right suppliers and increasing the quality of the purchased component can reduce the average number of components to 6 components per unit. The cost per component is 500. f. A plant produces 100 different electronic products. Each product requires an average of 8 components that are purchased externally. The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have 4 components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand are 900,000 per year. 5-44 Nonvalue-Added Costs Refer to the information for Diviney Manufacturing on the previous page. Required: Estimate the nonvalue-added cost for each situation.
Eyring Manufacturing produces a component used in its production of washing machines. The time to set up and produce a batch of the components is two days. The average daily usage is 800 components, and the maximum daily usage is 875 components. Required: Compute the reorder point assuming that safety stock is carried by Eyring Manufacturing. How much safety stock is carried by Eyring?
Use the following information for Exercises 5-44 through 5-46: The following six situations at Diviney Manufacturing Inc. are independent. a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is 12, the cost per machine hour is 8, and the cost per pound of materials is 10. b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is 50. c. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is 20. d. Inspection time for a plant is 16,000 hours per year. The cost of inspection consists of salaries of 8 inspectors, totaling 320,000. Inspection also uses supplies costing 5 per inspection hour. The company eliminated most defective components by eliminating low-quality suppliers. The number of production errors was reduced dramatically by installing a system of statistical process control. Further quality improvements were realized by redesigning the products, making them easier to manufacture. The net effect was to achieve a close to zero-defect state and eliminate the need for any inspection activity. e. Each unit of a product requires 6 components. The average number of components is 6.5 due to component failure, requiring rework and extra components. Developing relations with the right suppliers and increasing the quality of the purchased component can reduce the average number of components to 6 components per unit. The cost per component is 500. f. A plant produces 100 different electronic products. Each product requires an average of 8 components that are purchased externally. The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have 4 components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand are 900,000 per year. 5-46 Type of Activity Management Refer to the information for Diviney Manufacturing on the previous page. Required: For each situation, identify the cost reduction measure: activity elimination, activity reduction, activity sharing, or activity selection.
Gumbrecht Company has the following departmental manufacturing layout for one of its plants: 12 minutes 6 minutes Wait time - 10 minutes Move and wait time - 15 minutes Casting Grinding Move and wait time - 25 minutes 10 minutes 2 mimutes Move and wait time - 20 minutes Drilling Finishing A consulting firm has recommended a value stream with the following manufacturing cell: 6 minutes 12 minutes Grinding Casting Dniling Finishing 10 minutes 2 minutes
Use the following infonnation for Exercises 5-44 through 5-46: The following sixsituations at Diviney Manufacturing Inc. are independent. A manual insertion process takes 30 minutes and 8 pounds of material to produce a Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is $12, the cost per machine hour is $ 8, and the cost per pound of materials is $10. With its original design, a gear requires 8 hours of setup By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%.The cost per setup hour is $50. A product currently requires 6 By redesigning the manufacturing layout, the number of moves can be reduced from 6 to o. The cost per move is $20. Inspection time for a plant is 16,000 hours per The cost of inspection consists of salaries of 8 inspectors, totaling $320,000. Inspection also uses supplies costing $5 per inspection hour. The company…
To manufacture a toy duck the six assembly tasks need to be done in sequence. The time it takes for a worker to complete these tasks are given in the following table. Time (seconds) Task A-1 180 A-2 90 A-3 30 A-4 60 A-S 60 A-6 120 We have three candidate workers (W1, W2, and W3) for our new production facility. There is a single eight-hour shift in a day. Workers have different skillsets such that W1 cannot be assigned to A-1, and W2 cannot do the tasks A-3 and A-4. The workers' daily payments are 20OTL, 140TL, 300TL for W1, W2, and W3, respectively. TL. (a) If the daily demand is 200 units, the minimum possible unit labor cost of a duck is TL. (b) If the daily demand is 100 units, the minimum possible unit labor cost of a duck is
Current Attempt in Progress Vaughn Company manufactures two products, Board 12 and case 165, Vaughn's overhead costs consist of setting up machines, $2720000; machining, $5700000; and inspecting. $1500000. Information on the two products and their estimated use of cost drivers is as follows: Direct labor hours Machine setups Machine hours Inspections O $6200000. O $3968000. Board 12 Case 165 25000 400 Ⓒ$4480000. O $4752000. 15000 600 24000 800 26000 Overhead assigned to Case 165 using activity-based costing is 700