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ch 19 B worksheets 16th-2

# ch 19 B worksheets 16th-2 - PROBLEM 19.1B SMIT CORPORATION...

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PROBLEM 19.1B SMIT CORPORATION a. Value-added production activities: b. Non-value-added production activities: c. Total cycle time: Production Activity Number of Days days Cutting materials ……………………………………………………… Rework ……………………………………………………… Warranty repairs ………………………………………………………. Quality training ……………………………………………………… Painting finished products ……………………………………………. Bending materials …………………………………………………….. Purchasing raw materials …………………………………………….. Assembling finished products ……………………………………….. Total cycle time ………………………………………………………..

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PROBLEM 19.1B SMIT CORPORATION (concluded) d. Manufacturing efficiency ratio: Value-Added Activity Days Cutting materials …………………………………… Painting finished products ………………………… Bending materials …………………………………… Purchasing raw materials ………………………… Assembling finished products ……………………… Total value-added time ……………………………… days e. The following activities might be reduced or eliminated if Smit implements a JIT system: f. Negative consequences: eliminates the jobs of employees performing non-value-added work. Value-Added Time ÷ Total Cycle Time Smit's total cycle time was computed in part c . Its value-added time is shown below: Given total value-added time of 60 days and a total cycle time of 86 days, Smit’s manufacturing efficiency ratio must be 70%: 60 days ÷ 86 days = 70 % Rework eliminated Warranty repairs - possibly reduced or eliminated Quality training - possibly reduced Positive consequences: reduction in cost of producing goods/services, reduction in overall production time, increase in profitability of company, constant improvement of product quality.
PROBLEM 19.2B THE PARVEE COMPANY a. Target Cost: PAR Target Cost = Target Price - Target Profit Target Price = \$ Target Profit = Target Cost = Target Cost: VEE Target Cost = Target Price - Target Profit Target Price = \$ Target Profit = Target Cost = b. If fixed overhead is allocated based on units of production, the fixed overhead cost per unit is equal to \$62.50 calculated as follows: Allocation Rate = Fixed Overhead = = per Unit Total Units of Production Total manufacturing cost per unit: PAR VEE Direct materials cost per unit ……………………………………………..

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