Signatron Corporation

1069 Words May 5th, 2013 5 Pages
Signatron Corporation
Producer of rectifiers (electronic 'resistors')
1 Basic facts: Helen Barnes, a recent graduate from B-school is assigned as assistant to Jim Jacoby, Signatron's Sales Manager for rectifiers Order is received for 6,000 units of number 401 rectifiers; not sufficient units (only 3,000) exist in the inventory. Order can be filled with units that met or exceeded the specifications of product ordered (402 or above). Customer will not pay extra for extra quality. 2 Production process: 60% of the total chips are first-class; 40% are seconds < 20% of the total chips are eventually sold as part of the regular product line 3 Accounting Methodology: Direct costs are allocated directly Manufacturing costs are "joint" with respect
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** Allocated as per Relative Sales Value approach Per Batch Batches $ $ $ $ 2,500 1,600 2,300 6,400 Annual Cost

$

20

$ $ $ $

128,000 12,000 60,000 200,000

Series 400 Rectifiers
Prod. 401 402 403 404 405 Blockade 0.25-0.74 0.75-1.24 1.25-1.74 1.75-2.24 2.25-2.75 Max Voltage 300 v 400 v 500 v 600 v 700 v Annual Sales Orders 100,000 140,000 100,000 40,000 20,000 400,000 SP/Unit $ $ $ $ $ 0.40 0.60 0.70 0.80 1.00 Current Inventory 3,000 10,000 9,000 8,000 5,000 35,000 Output per Batch^ 4,500 6,000 4,500 3,000 2,000 20,000 20 Annual Output 90,000 120,000 90,000 60,000 40,000 400,000 Annual Sales 40,000 84,000 70,000 32,000 20,000 246,000

$ $ $ $ $ $

Total batches per annum Process per batch: Wafers Chips per wafer Total production Less: seconds 40% Net production Less: Units not sold as regulars 2/3 Units eventually sold as part of regular product line

50 2,000 100,000 40,000 60,000 40,000 20,000

^ Average output per product from an average batch, as per historical data. Rejects/Seconds: Additional 5,000 units are produced as rejects; sold as seconds. Demand varies widely, is price sensitive; such units are offered at $0.25 each. Seconds Inventory: Currently stands at 65,000. No…

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