Posted: July 7th, 2016
After installing JIT, three manufacturing cells were created, and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $540,000; however, these costs are now traceable to each cell.
Cell, 4-inch $ 90,000
Cell, 6-inch 160,000
Cell, 8-inch 290,000
Required:
a. Compute the maintenance cost per roll for each type of pipe before JIT is installed.
b. Compute the maintenance cost per roll for each type of pipe after JIT is installed.
c. Explain why the JIT maintenance cost per roll is more accurate than the cost per roll using the traditional approach.
2. Gibson, Inc., has developed ideal standards for four activities: labor, materials, inspection, and receiving.
Information is as follows:
Activity Activity Driver SQ AQ SP
Labor Hours 500 550 $ 32
Materials Pounds 2,000 2,500 48
Inspection Inspection hours 0 375 22
Receiving Orders 60 75 800
The actual prices paid per unit of each activity driver were equal to the standard prices.
Required:
Complete the following cost report.
Activity Value-Added Non-value-Added Actual
Labor $_____________ $_____________ $____________
Materials _____________ _____________ ____________
Inspection _____________ _____________ ____________
Receiving _____________ _____________ ____________
Totals $_____________ $_____________ $____________
3 Marshek Industries has the theoretical capability to produce 119,000 units per month but currently produces 102,000 units. The conversion cost for the month is $3,750,000. There are 8,500 production hours available within the plant per month. In addition to processing time, to produce a unit takes 15 minutes of move time and 10 minutes of wait time.
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