i) Compute the number of equivalent units of work performed by the Molding Department during the period and the cost per equivalent unit for direct materials and conversion costs.
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- 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.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.Question 3Tools & More uses three departments to produce plastic handles for screwdrivers. Forming thehandles require mixing the raw materials, molding and drying. After the drying process, thescrewdrivers are completed by assembling the handles and the shanks and packing forshipment. The following information relates to the molding process:There was no opening WIP stock5,000 kilos of material at $43.08 per kilo entered the processDirect materials added $92,000Direct wages incurred 65,700Production overhead 75,100Normal loss is 4% of inputA quality control check was done at the end of the molding process and 350 handles wererejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00each, and it is company’s policy to credit the process account with the scrap value of thenormal loss units.Closing WIP was 800 units but these were incomplete, having reached the followingpercentages of completion for each of the elements of cost listedInput…
- Question 3Tools & More uses three departments to produce plastic handles for screwdrivers. Forming thehandles require mixing the raw materials, molding and drying. After the drying process, thescrewdrivers are completed by assembling the handles and the shanks and packing forshipment. The following information relates to the molding process: There was no opening WIP stock5,000 kilos of material at $43.08 per kilo entered the processDirect materials added $92,000Direct wages incurred 65,700Production overhead 75,100Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles wererejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00each, and it is company’s policy to credit the process account with the scrap value of thenormal loss units.Closing WIP was 800 units but these were incomplete, having reached the followingpercentages of completion for each of the elements of cost listed Input…Please answer part iv Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock 5,000 kilos of material at $43.08 per kilo entered the process Direct materials added $92,000 Direct wages incurred 65,700 Production overhead 75,100 Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units. Closing WIP was 800 units but these were incomplete, having reached the following percentages of…Tools & More uses three departments to produce plastic handles for screwdrivers. Forming thehandles require mixing the raw materials, molding and drying. After the drying process, thescrewdrivers are completed by assembling the handles and the shanks and packing forshipment. The following information relates to the molding process: There was no opening WIP stock5,000 kilos of material at $43.08 per kilo entered the processDirect materials added $92,000Direct wages incurred 65,700Production overhead 75,100Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles wererejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00each, and it is company’s policy to credit the process account with the scrap value of thenormal loss units.Closing WIP was 800 units but these were incomplete, having reached the followingpercentages of completion for each of the elements of cost listed Input material…
- Tools & More uses three departments to produce plastic handles for screwdrivers. Forming thehandles require mixing the raw materials, molding and drying. After the drying process, thescrewdrivers are completed by assembling the handles and the shanks and packing forshipment. The following information relates to the molding process: There was no opening WIP stock5,000 kilos of material at $43.08 per kilo entered the processDirect materials added $92,000Direct wages incurred 65,700Production overhead 75,100Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles wererejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00each, and it is company’s policy to credit the process account with the scrap value of thenormal loss units.Closing WIP was 800 units but these were incomplete, having reached the followingpercentages of completion for each of the elements of cost listed Input material…Farmers Plus uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock8,000 kilos of material at $43.08 per kilo entered the processDirect materials added$29,000Direct wages incurred22,700Production overhead55,100Normal loss is 4% of inputA quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units.Closing WIP was 800 units but these were incomplete, having reached the following percentages of completion for each of the elements of cost listed Input…Farmers Plus uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock8,000 kilos of material at $43.08 per kilo entered the processDirect materials added$29,000Direct wages incurred22,700Production overhead55,100Normal loss is 4% of inputA quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units.Closing WIP was 800 units but these were incomplete, having reached the following percentages of completion for each of the elements of cost listed Input…
- Question 3 Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock 5,000 kilos of material at $43.08 per kilo entered the process Direct materials added $92,000 Direct wages incurred 65,700 Production overhead 75,100 Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units. Closing WIP was 800 units but these were incomplete, having reached the following percentages of…Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock 5,000 kilos of material at $43.08 per kilo entered the process Direct materials added $92,000 Direct wages incurred 65,700 Production overhead 75,100 Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units. Closing WIP was 800 units but these were incomplete, having reached the following percentages of completion for each of the…Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock 5,000 kilos of material at $43.08 per kilo entered the process Direct materials added $92,000 Direct wages incurred 65,700 Production overhead 75,100 Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units. Closing WIP was 800 units but these were incomplete, having reached the following percentages of completion for each of…