Management of Mittel Company 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 0.3 days 14.0 days 2.7 days 1.0 days 5.0 days Required: 1. Compute the throughput time. 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 answers to the neares whole percent.) 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage

Management of Mittel Company 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 0.3 days 14.0 days 2.7 days 1.0 days 5.0 days Required: 1. Compute the throughput time. 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 answers to the neares whole percent.) 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 60P: Scattergraph, High-Low Method, and Predicting Cost for a Different Time Period from the One Used to...

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Refer to the information for Farnsworth Company (p. 139) for the first 10 months of data on receiving orders and receiving cost. Now suppose that Tracy has gathered 2 more months of data: Note: For the following requirements, round the intercept terms to the nearest dollar, round the variable rates to the nearest cent, and R2 to two decimal places. Required: 1. Run two regressions using a computer spreadsheet program such as Excel. First, use the method of least squares on the first 10 months of data. Then, use the method of least squares on all 12 months of data. Write down the results for the intercept, slope, and R2 for each regression. Compare the results. 2. CONCEPTUAL CONNECTION Prepare a scattergraph using all 12 months of data. Do any points appear to be outliers? Suppose Tracy has learned that the factory suffered severe storm damage during Month 11 that required extensive repairs to the receiving areaincluding major repairs on a forklift. These expenses, included in Month 11 receiving costs, are not expected to recur. What step might Tracy, using her judgment, take to amend the results from the method of least squares? 3. CONCEPTUAL CONNECTION Rerun the method of least squares, using all the data except for Month 11. (You should now have 11 months of data.) Prepare a cost formula for receiving based on these results, and calculate the predicted receiving cost for a month with 1,450 receiving orders. Discuss the results from this regression versus those from the regression for 12 months of data.
Scattergraph, High-Low Method, and Predicting Cost for a Different Time Period from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. Required: 1. Prepare a scattergraph based on the 10 months of data. Does the relationship appear to be linear? 2. Using the high-low method, prepare a cost formula for the receiving activity. Using this formula, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated? Use the following information for Problems 3-60 and 3-61: Farnsworth Company has gathered data on its overhead activities and associated costs for the past 10 months. Tracy Heppler, a member of the controllers department, has convinced management that overhead costs can be better estimated and controlled if the fixed and variable components of each overhead activity are known. One such activity is receiving raw materials (unloading incoming goods, counting goods, and inspecting goods), which she believes is driven by the number of receiving orders. Ten months of data have been gathered for the receiving activity and are as follows:
(Appendix 11A) Manufacturing Cycle Efficiency Ventris Company found that one of its manufacturing cells had actual cycle time of 15 minutes per unit. The theoretical cycle time for this cell was 9 minutes per unit. Required: 1. Calculate the amount of processing time per unit and the amount of nonprocessing time per unit. 2. Calculate the MCE.
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: a. 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)?
Management of Mittel Company 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 0.4 days Wait time (from order to start of production) 16.5 days Process time 2.8 days Move time 0.7 days Queue time 3.7 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? (Do not round intermediate…
Traya Corp.'s management keeps track of the time it takes to process orders. During the most recent month, the following average times were recorded per order: Wait time is 10.6 days; Inspection time 0.2 day; Process time 2.6 days; Move time 0.6 days; Queue 3.2 days. a. Compute the throughput time b. Compute the manufacturing cycle efficiency c. What percentage of the production time is spent in non-value added activities? d. Compute the delivery cycle time With solution pls
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 0.3 days Wait time (from order to start of production) 14.0 days Process time 2.7 days Move time 1.0 days Queue time 5.0 days 1. Compute the throughput time. 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. 3. What percentage of the throughput time was spent in non–value-added activities? 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE?
Novex Company keeps careful track of the time to complete customer orders. During the most recent quarter, the following average times were recorded for each unit or order: Days Wait time . . . . . . . . . . . . 17.0 Inspection time . . . . . . . . 0.4 Process time . . . . . . . . . .2.0 Move time . . . . . . . . . . . .0.6 Queue time . . . . . . . . . . .5.0 Goods are shipped as soon as production is completed. Required: Compute the throughput time. Compute the manufacturing cycle efficiency (MCE). What percentage of the production time is spent in non-value-added activities? Compute the delivery cycle time.
Measures of Internal Business Process Performance 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: Required: 1. Compute the throughput time. 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. 3. What percentage of the throughput time was spent in non-value-added activities? 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE?
DGT Corporation's management keeps track of the time it takes to process orders. During themost recent month, the following average times (days) were recorded per order: Wait time 13.9Inspection time 0.4Process time 3.2Move time 0.7Queue time 2.8 Required:a. Compute the throughput time. b. Compute the manufacturing cycle efficiency (MCE).c. What percentage of the production time is spent in non-value-added activities? d. Compute the delivery cycle time.
Management of Mittel Rhein AG of Koln, Germany, would ike to reduce the amount of time between when a customer places an order and when the order is shipped For the first quartet of operations during the cutrent year the following data were reported: Required: 1. Compute the throughput time (Round your answer to 1 decimol place.) 2. Compute the manufacturing cycle efficiency (MCE) for the quarter (Round your percentage onswer to nearest whole percent.) 3. What percentage of the throughput time was spent in non-value-added activities? (Round your percentoge answer to nearest whole percent.) 4. Compute the delivery cycle time. (Round your intermediote calculations and finol answer to 1 decimol ploce.) 5. If by using Lean Production all queue time during production is Eiminated, what wil be the new MCE? (Round your percentoge onswer to 1 decimal ploce.)
Schlarbaum Corporation's management keeps track of the time it takes to process orders. During the most recent month, the following average times were recorded per order: Days Wait time 13.2 Inspection time 0.7 Process time 1.6 Move time 0.6 Queue time 2.2 Required: a. Compute the throughput time. (Round your answer to 1 decimal places.) b. Compute the manufacturing cycle efficiency (MCE). (Do not round intermediate calculations. Round your answer to nearest whole percentage.) c. What percentage of the production time is spent in non-value-added activities? (Do not round intermediate calculations. Round your answer to nearest whole percentage.) d. Compute the delivery cycle time. (Round your answer to 1 decimal place.)