600 2.000 PROTECTED VIEW Be carefules from the Internet can contain viruses. Unless you need to edit it's safe to stay in Protected View Enable Editing B15 X 222000 B D H 1 See Lean Manufacturing Daly Activity 2 3 Electronic Testing Equipment Company is transitioning to a lean manufacturing system and has just finalized two order Fulfillment valve streams (Testing Tools & Replacement Components) 4 Before moving to the value-stream structure, Electronic Testing had a well-developed ABC system and had good success with a better accruacy with product costs 5 Management wants to discontinue ABC because of its intense data demands and the cost of updating to the lean practices 6 They also want to be sure that the average costing approach of value-stream costing does not produce distorted product costs 7 Management has provided information on the Testing Tools Value Stream for the coming week B 9 Conversion Electrometor Quarketor Total Activity 10 Activity Costs Chours used) Thours used) Hours 11 12 Order processing $ 35,000 500 1.250 1.750 13 Purchasing 75,000 200 400 14 Lathe 180,400 480 320 800 15 Mining 222.000 800 1,200 2,000 16 Drilling 138,000 720 1,680 2,400 17 Assembly 58.000 1,300 700 18 Inspection 30,000 800 200 1,000 19 Shipping 18,000 500 400 900 20 Invoicing 22,000 800 800 21 22 To 778.400 6.100 6,050 13.050 23 24 25 During this week this value stream is expected to produce and ship the following units of each part 26 27 Electrometr 22.000 28 Quarketer 34,000 29 30 Material costs are computed separately, so we are interested in comparing the conversion cost for ABC vs Lean 31 32 Complete items (1) through (3) below 33 34 35 (1) Calculate the average unit conversion cost for the two machine parts 36 37 Average Conversion Cost per Unit 38 39 40 41 ABC vs Lean Type here to search o c 3' ED PROTECTED VIEW Be careful--files from the Internet can contain viruses. Unless you need to edit. it's safer to stay in Protected View Enable Editing B15 fx 222000 E F B D 42 43 (2) (a) Calculate the conversion cost per unit for each part, using ABC. 44 (2) (b) Comparing ABC unit cost with the average cost, what would you recommend? Why? 45 46 Calculate Activity Rates: (Round to cents) 47 Order processing 48 Purchasing 49 Lathe 50 Milling 51 Drilling 52 Assembly 53 Inspection 54 Shipping 55 Invoicing 56 57 Conversion Cost Assignment 58 Order processing 59 Purchasing 60 Lathe 61 Milling 62 Drilling 63 Assembly 64 Inspection 65 Shipping 66 Invoicing 67 68 69 Unit Conversion Cost 70 71 72 73 (3) (a) Calculate the conversion cost per unit using DBC. (First, you will need to calculate the cycle time for each product) 74 (3) (b) Based on this outcome, what would you recommendt to the management of Manhandle Tool Company? Why? 75 76 Cycle time product 1 78 79 Cycle time product 2 80 81 ABC vs Lean Data Review File Formulas Home Insert Draw Page Layout PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to em B15 X fc 222000 B B 81 82 Conversion Cost Rate 83 84 85 Unit Conversion Cost 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 1112 113 114 115 116 600 2.000 PROTECTED VIEW Be carefules from the Internet can contain viruses. Unless you need to edit it's safe to stay in Protected View Enable Editing B15 X 222000 B D H 1 See Lean Manufacturing Daly Activity 2 3 Electronic Testing Equipment Company is transitioning to a lean manufacturing system and has just finalized two order Fulfillment valve streams (Testing Tools & Replacement Components) 4 Before moving to the value-stream structure, Electronic Testing had a well-developed ABC system and had good success with a better accruacy with product costs 5 Management wants to discontinue ABC because of its intense data demands and the cost of updating to the lean practices 6 They also want to be sure that the average costing approach of value-stream costing does not produce distorted product costs 7 Management has provided information on the Testing Tools Value Stream for the coming week B 9 Conversion Electrometor Quarketor Total Activity 10 Activity Costs Chours used) Thours used) Hours 11 12 Order processing $ 35,000 500 1.250 1.750 13 Purchasing 75,000 200 400 14 Lathe 180,400 480 320 800 15 Mining 222.000 800 1,200 2,000 16 Drilling 138,000 720 1,680 2,400 17 Assembly 58.000 1,300 700 18 Inspection 30,000 800 200 1,000 19 Shipping 18,000 500 400 900 20 Invoicing 22,000 800 800 21 22 To 778.400 6.100 6,050 13.050 23 24 25 During this week this value stream is expected to produce and ship the following units of each part 26 27 Electrometr 22.000 28 Quarketer 34,000 29 30 Material costs are computed separately, so we are interested in comparing the conversion cost for ABC vs Lean 31 32 Complete items (1) through (3) below 33 34 35 (1) Calculate the average unit conversion cost for the two machine parts 36 37 Average Conversion Cost per Unit 38 39 40 41 ABC vs Lean Type here to search o c 3' ED PROTECTED VIEW Be careful--files from the Internet can contain viruses. Unless you need to edit. it's safer to stay in Protected View Enable Editing B15 fx 222000 E F B D 42 43 (2) (a) Calculate the conversion cost per unit for each part, using ABC. 44 (2) (b) Comparing ABC unit cost with the average cost, what would you recommend? Why? 45 46 Calculate Activity Rates: (Round to cents) 47 Order processing 48 Purchasing 49 Lathe 50 Milling 51 Drilling 52 Assembly 53 Inspection 54 Shipping 55 Invoicing 56 57 Conversion Cost Assignment 58 Order processing 59 Purchasing 60 Lathe 61 Milling 62 Drilling 63 Assembly 64 Inspection 65 Shipping 66 Invoicing 67 68 69 Unit Conversion Cost 70 71 72 73 (3) (a) Calculate the conversion cost per unit using DBC. (First, you will need to calculate the cycle time for each product) 74 (3) (b) Based on this outcome, what would you recommendt to the management of Manhandle Tool Company? Why? 75 76 Cycle time product 1 78 79 Cycle time product 2 80 81 ABC vs Lean Data Review File Formulas Home Insert Draw Page Layout PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to em B15 X fc 222000 B B 81 82 Conversion Cost Rate 83 84 85 Unit Conversion Cost 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 1112 113 114 115 116