close solutoin list

Cycle Time, Velocity, Product Costing Goldman Company has a JIT system in place. Each manufacturing cell is dedicated to the production of a single product or major subassembly. One cell, dedicated to the production of telescopes, has four operations: machining, finishing, assembly, and qualifying (testing). For the coming year, the telescope cell has the following budgeted costs and cell time (both at theoretical capacity): During the year, the following actual results were obtained: Required: ( Note: Round answers to two decimal places.) 1. Compute the velocity (number of telescopes per hour) that the cell can theoretically achieve. Now, compute the theoretical cycle time (number of hours or minutes per telescope) that it takes to produce one telescope. 2. Compute the actual velocity and the actual cycle time. 3. CONCEPTUAL CONNECTION Compute the budgeted conversion costs per minute. Using this rate, compute the conversion costs per telescope if theoretical output is achieved. Using this measure, compute the conversion costs per telescope for actual output. Does this product-costing approach provide an incentive for the cell manager to reduce cycle time? Explain.

BuyFind

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773
BuyFind

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

Solutions

Chapter
Section
Chapter 5, Problem 62P
Textbook Problem

Cycle Time, Velocity, Product Costing

Goldman Company has a JIT system in place. Each manufacturing cell is dedicated to the production of a single product or major subassembly. One cell, dedicated to the production of telescopes, has four operations: machining, finishing, assembly, and qualifying (testing).

For the coming year, the telescope cell has the following budgeted costs and cell time (both at theoretical capacity):

Chapter 5, Problem 62P, Cycle Time, Velocity, Product Costing Goldman Company has a JIT system in place. Each manufacturing , example  1

During the year, the following actual results were obtained:

Chapter 5, Problem 62P, Cycle Time, Velocity, Product Costing Goldman Company has a JIT system in place. Each manufacturing , example  2

Required:

(Note: Round answers to two decimal places.)

  1. 1. Compute the velocity (number of telescopes per hour) that the cell can theoretically achieve. Now, compute the theoretical cycle time (number of hours or minutes per telescope) that it takes to produce one telescope.
  2. 2. Compute the actual velocity and the actual cycle time.
  3. 3. CONCEPTUAL CONNECTION Compute the budgeted conversion costs per minute. Using this rate, compute the conversion costs per telescope if theoretical output is achieved. Using this measure, compute the conversion costs per telescope for actual output. Does this product-costing approach provide an incentive for the cell manager to reduce cycle time? Explain.

Expert Solution

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Solution

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 5 Solutions

Managerial Accounting: The Cornerstone of Business Decision-Making
Show all chapter solutions
Ch. 5 - What is driver analysis? What role does it play in...Ch. 5 - What are value-added activities? Value-added...Ch. 5 - What are nonvalue-added activities? Nonvalue-added...Ch. 5 - Identify and define four different ways to manage...Ch. 5 - What is cycle time? Velocity?Ch. 5 - A batch-level driver is consumed by a product each...Ch. 5 - Which of the following is a nonunit-level driver?...Ch. 5 - Use the following information for Multiple-Choice...Ch. 5 - Use the following information for Multiple-Choice...Ch. 5 - The first stage of ABC entails the assignment of...Ch. 5 - The second stage of ABC entails the assignment of...Ch. 5 - Interview questions are asked to determine a. what...Ch. 5 - The receiving department employs one worker who...Ch. 5 - Assume that the moving activity has an expected...Ch. 5 - Which of the following is a true statement about...Ch. 5 - Which of the following is a true statement about...Ch. 5 - This year, Lambert Company will ship 1,500,000...Ch. 5 - Lambert Company has two suppliers: Deming and...Ch. 5 - A forklift and its driver used for moving...Ch. 5 - Which of the following are nonvalue-added...Ch. 5 - Suppose that a company is spending 60,000 per year...Ch. 5 - The cost of inspecting incoming parts is most...Ch. 5 - Thom Company produces 60 units in 10 hours. The...Ch. 5 - Thom Company produces 60 units in 10 hours. The...Ch. 5 - Striving to produce the same activity output with...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Calculating ABC Unit Costs Perkins National Bank...Ch. 5 - Assigning Costs to Activities McCourt Company...Ch. 5 - Activity-Based Customer Costing Sleepeze Company...Ch. 5 - Activity-Based Supplier Costing Clearsound uses...Ch. 5 - Nonvalue-Added Costs Lemmons Inc. has the...Ch. 5 - Velocity and Cycle Time Kolby Company takes 36,000...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Calculating ABC Unit Costs Community Credit Union...Ch. 5 - Assigning Costs to Activities Craig Company...Ch. 5 - Activity-Based Customer Costing Limpio Company...Ch. 5 - Activity-Based Supplier Costing Blackburn Inc....Ch. 5 - Nonvalue-Added Costs Evans Inc. has the following...Ch. 5 - Velocity and Cycle Time Tara Company takes 8,000...Ch. 5 - Consumption Ratios; Activity Rates Saludable...Ch. 5 - Activity Rates Patten Company uses activity-based...Ch. 5 - Comparing ABC and Plantwide Overhead Cost...Ch. 5 - Activity-Based Product Costing Suppose that a...Ch. 5 - Assigning Costs to Activities, Resource Drivers...Ch. 5 - Activity-Based Customer-Driven Costs Suppose that...Ch. 5 - Activity-Based Supplier Costing Bowman Company...Ch. 5 - Use the following information for Exercises 5-44...Ch. 5 - Use the following information for Exercises 5-44...Ch. 5 - Use the following information for Exercises 5-44...Ch. 5 - Cycle Time and Velocity In the first quarter of...Ch. 5 - Product-Costing Accuracy, Consumption Ratios Plata...Ch. 5 - Product-Costing Accuracy, Consumption Ratios,...Ch. 5 - Formation of an Activity Dictionary A hospital is...Ch. 5 - Activity Rates and Activity-Based Product Costing...Ch. 5 - Value- and Nonvalue-Added Costs Waterfun...Ch. 5 - Functional-Based versus Activity-Based Costing For...Ch. 5 - Plantwide versus Departmental Rates,...Ch. 5 - Production-Based Costing versus Activity-Based...Ch. 5 - Elmo Clinic has identified three activities for...Ch. 5 - Customers as a Cost Object Morrisom National Bank...Ch. 5 - Grundvig Manufacturing produces several types of...Ch. 5 - Activity-Based Supplier Costing Levy Inc....Ch. 5 - Danna Martin, president of Mays Electronics, was...Ch. 5 - John Thomas, vice president of Mallett Company (a...Ch. 5 - Cycle Time, Velocity, Product Costing Goldman...Ch. 5 - Sharp Paper Inc. has three paper mills, one of...Ch. 5 - Consider the following conversation between...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
What does recognition mean in accounting?

Intermediate Accounting: Reporting And Analysis

Describe the six distribution channels. Give an example of each.

Foundations of Business (MindTap Course List)

WACC Midwest Electric Company (MKC) uses only debt and common equity. It can borrow unlimited amounts at an int...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Give an example of a future cost that is not relevant.

Cornerstones of Cost Management (Cornerstones Series)

How do the receipts and expenditures of a state-operated lottery affect GDP?

Economics: Private and Public Choice (MindTap Course List)