In the analyze stage, the first thing that we did was count the total defect and the total cost of each machine. To be able to do this, the group needs to read every comment detail to find out each order defect and its cost. We had 291 data orders that we read each one of them and consist of 57 orders for 8c auto machine, 28 orders for 10c auto blue machine, 67 orders for 10c auto green machine, 65 orders for 12c auto blue machine, and 74 orders for 12c auto green machine. We would like to know the summary information about the total defect and total cost for each operator team and machine. Table 1 was developed to give the detail information about how many defects that happen during the month July-December last year and the total cost to spend …show more content…
The reason why we divided these data in two categories because as we said earlier that Scarborough Company had about 2% production defect rate. So, the company regulation were if the defect was under 2%, the production would be still running as usual and the operator just needs to change the defect shirt with a new one. That’s why there was only total cost for the shirt only in the defect under 2%, as you can see from table 1. On the other hand, if the percentage of defects were over 2%, the company would run the replacement process that costs more money. The replacement cost such as for replacement new ink, set up the machine, order a new shirt, overtime worker and some other technical replacement. Moreover, the cost also include for incoming freight cost and outgoing freight cost. Incoming freight cost was an additional cost for shipping a new shirt from the vendor to Scarborough Company. Outgoing freight cost was an additional cost for shipping the product from Scarborough Company to the final …show more content…
These defects cost $3,996.31 with the detail of $733.37 from 8c Auto machine, $511.38 from 10c Auto blue machine, $652.80 from 10c Auto green machine, $1400.21 from 12c Auto blue machine, and $698.55 from 12c Auto green machine. From these data, we able to calculate the defect contribution from each machine that you could find from table 3. We found out that 8c Auto machine contribute 13.96 % of total defect and 18%35 of total cost, 10c Auto blue machine contribute 10.47% of total defect and 12.80% total cost, 10c Auto green machine contribute 19.26% of total defect and 16.34% total cost, 12c Auto blue machine contribute 31.98% of total defect and 35.04% total cost, and 12c Auto green machine contribute 24.32% total defect and 17.48% total
John Deere Component Works (JDCW), subdivision of John Deere and Co. was in charged specifically of the manufacturing of tractor component parts. The demand for JDCW’s products had problems due to the collapse of farmland value and commodity prices. Numerous and constant failures in JDCW’s competition for bids, alerted top management to start questioning their current costing methods. As an outcome, the analysis has to be guided to research on the current costing methods with the intention of establishing legitimacy and to help the company in adopting a more appropriate costing system.
The presentation of the material is in dollars only. Overhead is applied to products as a percent of direct labor dollar cost. Factory profit for each year is found by subtracting direct material, direct labor, and direct overhead costs from total sales. The overhead percentage is calculated at the same time budgeting and is applied as a single overhead pool throughout each model year. The consulting company used 435% of direct labor costs in 1987 for their study; the budgeted was actually 437% (OH/DL=107,954/24,682). A similar percentage applies in the following year (109890/25294=434.5%). However in the next two years, after the outsourcing of oil pans and mufflers was enacted, the allocation of overhead in...
Lululemon’s has to produce and sell 150,000 jackets in order to cover their total expenses, fixed and variable. At this level of sales, Lululemon’s will breakeven (profit = loss).
Despite the idea of humans functioning on a dysfunctional system, there may still be some objections arguing for the goodness of these factors or how we are looking at the problem from an incorrect lens. One such a response could be that the mind and dysfunctional system are two separate things, and rather than this situation being purely mental processes, it could be a physical response. By thinking of the mind as a racecar driver and the system as a racecar with a blown-out tire it can be shown that humans are still perfectly functional, but the problem exists in the vehicle. While the driver may desire to steer the car in one direction, that broken wheel causes the car to go into a different direction. Therefore, the whole situation can
Finally, I have suggested some recommendations for the issues that I have mentioned above. In reference to the first issue, it will be profitable for the company to change to level monthly production.
The company is using a batch shop process flow structure. CBF, Inc. bases its board fabrication process on the average job size or on its typical order. This means that the company proceeds with the manufacturing process in batches so as to meet the specific requirements per order. The typical contract that the company currently gets is 60 boards per order. However, due to persisting factory defects, they manufacture a total of 75 boards per batch in order to compensate for 20% of the boards that they typically reject during the process.
The Consumer and Industrial Products, Inc a company where their headquarters is based in the United States , also doing business internationally with facilities in Europe, Asia and South America. They are a manufacturing company what produced well known products to individuals and industries. This company is experiencing a great deal of trouble with their internal Payable Audit System (PAS) and how it would purchase goods; receive goods and pays for them. They are challenged with the redundancy and the lack of productivity to their system. They were finding ways to lower costs and eliminating steps in how these processes are getting accomplished. They decided that they needed to change their system and the way they did things at their business. There are some people, their roles and departments that will be closely involved with the process of this project. Some of these important roles will come from Ted Anderson director of disbursements, Peter Shaw the user project manager and Linda Watkins project director for the Payable Audit System (PAS). In addition, the Steering Group and the IS management department will have some important roles to the project too. Finally, there will be several major problems with the development of the project and how the one person would deal with these issues.
a) Re-engineer 71/2hp for higher torque mfg cost of $790. would be $410. per unit or a "mark up" of 52%.
Since more than 40 years, Toyota Company was thinking how to develop the traditional process costing system and the production system. Some of the companies believe that the increasing of the production is a big profit, while Toyota proved the opposite. The more you increase the products out of the need of the market, the more losses you are going to gain. This kin...
Signode Industries Inc. - Providing Packaging Solutions Executive Summary SIGNODE INDUSTRY: DILEMMA AT HAND: Mr. Gary Reed, President of Signode Industries packaging division, is in a dilemma as what he should be his course of action to meet the 6.8% increase in price of cold rolled steel- the raw material used in manufacture of Signode’s primary product, steel strapping. There are few options given in the case: Increase Signode’s strapping prices to offset the increased price of cold – rolled steel. Maintain Signode’s current book prices as increasing prices would affect sales force morale. Introduce price-flex model as proposed by Jack Davis i.e. a kind of selective discounting or premium charging for customized services. Recommendations Reason: (All data in accordance to 1983) In accordance to Exhibit 1: Sales of Packaging Division of the company = $285,950 In accordance to Table A: Sales of Apex = 33.3% of $285,950 Sales of BBM = 26.8% of $285,950 Sales of HDM = 33.4% of $285,950 Sales of Customized Products = 6.5% of $285,950 In accordance to Exhibit 4: Similarly, For Apex: As it has a capacity utilization of 71% now, Suppose a sale is $100. Then contribution is $39.15 Therefore variable cost is $60.85. Now if we increase the capacity utilization to 100%, Sales becomes $ 141 since production increases by [(100-71)/71] * 100 = 41% Variable Cost = 141% of 60.85 = $85.8 Fixed Cost = 69.38% * 12.3 = $8.53 Total Cost = 85.8+8.53 = $94.33 EBIT = Sales – Variable cost – Fixed Cost = $46.67 % of EBIT = [(46.67/141) * 100] = 33.09% Suppose the company sales 100x units, the total cost was 69.38. Thus per unit cost was .6938. Now the company sells 141x units, the total cost...
A fraction-of-a-cent cost change can represent a large dollar change in overall profitability, when selling millions of units of product a month. Managers must carefully watch per unit costs on a daily basis through the production process, while at the same time dealing with materials and output in huge quantities” (From Academic
Smith then decides that he wants to see how the table would change if he decided to use a different bakery make the baked good for the store instead of civil service. With this change he expects the average demand by forty percent, and the bakery will charge two hundred percent of the current material costs. So, for this new table, to find the cost basis, you would take the direct material costs for the baked goods and multiply it by two hundred percent, and the drinks would stay the same. To find the markup percentage, you would do the same as you did with the original table by finding the total revenue and variable costs, including the change in demand that would occur do to getting the goods from a different bakery. To find the unit cost, you would take the new cost basis and multiply it by the new markup percentage for each item.
For example: with the increase of the number of products produced, the cost of operating a machine also increase. Second we have batch level costs which is associated with batches; producing a multiple units of the same product that are processed together is called a batch. The third type is product level costs which arise from any activity in order to support the production of products. The fourth and the last type is facility level costs, this costs cannot be determined with a particular unit, product or batch; this costs are fixed with respect to batches, products and number of units produced. A single measure of volume is used for allocating costs to each service or product in traditional method for example: direct material cost, machine hours, direct labor cost and direct labor hours. A cost driver is an activity that generate costs, it can be generated by two types of costs the first is a particular machine 's running costs where the costs is driven by production volume as machine hours; the second is quality inspection costs where the cost is driven by the number of times the relevant activity occurs as the number of
The overall purpose of cost accounting is to advise top administration and the management team on the most suitable and cost effective methods and actions to employ based on cost, capability and efficiencies of a given product or service. It can be defined as the method where all the expenditures used during execution of business activities are gathered, categorized, examined and noted down (Horngren & Srikant, 2000). Once these numbers are gathered and recorded the information is used to determine a selling price and/or to identify possible investment opportunities. Although the principal aim or function of cost accounting is to help the business administration with their decision making and business planning process, the cost accounting data
FLAWS ON THE BELIEF Wearing less revealing clothes is not correlated with rape and sexual harassment. To prove my stand, I will state flaws and points why the two objects; clothing and sexual harassment, are not associated with one another. “Different people have their own perception of appropriateness.” This flaw states that humans have different understandings, perception, and perspectives. And due to this unique feature, we have different definitions about the things around us.