Question#2Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).To make its bulb products, Bright Night requires 55,800 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows:Central Glass Company: $29.00 per pound of glass. Delivery schedule: 55,800 (620 lbs. x 90 days) pounds at the beginning of July to last for 3 months.Ithaca Glass Company: $29.15 per pound of glass. Delivery schedule: 620 pounds per working day (90 days in the quarter).Bright Night accepted Central Glass Company’s bid because it was the low-cost bid.3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Company’s bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.) Round to the nearest cent.$fill in the blank 5 per lb. Lead TimeSound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PCboard assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for solderingcomponents according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of board assembly time. After eachbatch is completed, the operator moves the assembled boards to the final assembly area. This move takes 12 minutes to complete.The final assembly for each stereo unit requires 21 minutes and is also done in batches of 50 units. A batch of 50 stereos is moved into the test building, which is across the street.The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait whilethe setup is performed. In the final test, the 50-unit batch is tested one at a time. Each test requires 11 minutes. The completed batch, after all testing, is sent to shipping forpackaging and final shipment to customers. A complete batch of 50 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is nomove time between these two operations. Packaging and labeling requires 11 minutes per unit.1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 50 units. Categorize thenon-value-added time into wait and move time. Round the percentage to one decimal place.Value-added lead timeX min.Non-value-added lead time:Wait time lead timeX min.Move time lead timemin.Total non-value-added lead timemin.Total lead timeX min.Value-added ratio (as a percent)%2. Move time in this process could best be reduced by:

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Question#2 Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days). To make its bulb products, Bright Night requires 55,800 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows: Central Glass Company: $29.00 per pound of glass. Delivery schedule: 55,800 (620 lbs. x 90 days) pounds at the beginning of July to last for 3 months. Ithaca Glass Company: $29.15 per pound of glass. Delivery schedule: 620 pounds per working day (90 days in the quarter). Bright Night accepted Central Glass Company’s bid because it was the low-cost bid. 3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Company’s bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.) Round to the nearest cent. $fill in the blank 5 per lb.

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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Question#2

Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).

To make its bulb products, Bright Night requires 55,800 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows:

Central Glass Company: $29.00 per pound of glass. Delivery schedule: 55,800 (620 lbs. x 90 days) pounds at the beginning of July to last for 3 months.
Ithaca Glass Company: $29.15 per pound of glass. Delivery schedule: 620 pounds per working day (90 days in the quarter).

Bright Night accepted Central Glass Company’s bid because it was the low-cost bid.

3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Company’s bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.) Round to the nearest cent.
$fill in the blank 5 per lb.

Lead Time
Sound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC
board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering
components according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of board assembly time. After each
batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 12 minutes to complete.
The final assembly for each stereo unit requires 21 minutes and is also done in batches of 50 units. A batch of 50 stereos is moved into the test building, which is across the street.
The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait while
the setup is performed. In the final test, the 50-unit batch is tested one at a time. Each test requires 11 minutes. The completed batch, after all testing, is sent to shipping for
packaging and final shipment to customers. A complete batch of 50 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no
move time between these two operations. Packaging and labeling requires 11 minutes per unit.
1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 50 units. Categorize the
non-value-added time into wait and move time. Round the percentage to one decimal place.
Value-added lead time
X min.
Non-value-added lead time:
Wait time lead time
X min.
Move time lead time
min.
Total non-value-added lead time
min.
Total lead time
X min.
Value-added ratio (as a percent)
%
2. Move time in this process could best be reduced by:

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