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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Just-in-time principles
Jupiter Shirt Company manufactures various styles of men's casual wear. Shirts are cut and assembled by a workforce that is paid by piece rate. This means that workers are paid according to the amount of work completed during a period of time. To illustrate, if the piece rate is $0.18 per sleeve assembled, and the worker assembles 1,000 sleeves during the day, then the worker would be paid $180 (1,000 X $0.18) for the day's work.
The company is considering adopting a just-in-time manufacturing philosophy by organizing work cells around various types of products and employing pull manufacturing. However, no change is expected in the compensation policy. On this point, the manufacturing manager stated the following:
Piecework compensation provides an incentive to work fast. Without it, the workers will just goof off and expect a full day's pay. We can't pay straight hourly wagesat least not in this industry.
How would you respond to the manufacturing manager's comments?

To determine

Concept Introduction:

Just in time means order as and when require. It reduces the cost of inventory handling, reduce lead times, reduce the wastage of inventory, reduce the ordering cost.

To comment:

The response on manufacturing managers statement.

Explanation

Just in time is for ordering inventory which will affect the inventory level. The production process will not affect with just in time system. Just in time clearly means rather than stock pile of inventory, better to produce product as and when customer demands.

Therefore, the laborer who earns wages on daily basis for ...

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