Value-Stream Reporting with Inventory Decrease

Rivera Manufacturing, Inc., has implemented lean manufacturing in its Kansas City plant as a pilot program. One of its value streams produces a family of small electric tools. The value-stream team managers were quite excited about the results, as some of their efforts to eliminate waste were proving to be effective. During the most recent three weeks, the following data pertaining to the electric tool value stream were collected:

Week l:

Demand	= 100 units @ $45
Beginning inventory	= 15 units @ $20 ($5 materials and $15 conversion)
Production	= 100 units using $450 of materials and $1,400 of conversion cost

Week 2:

Demand	= 110 units @ $45
Beginning inventory	= 15 units @ $20 ($5 materials and $15 conversion)
Production	= 100 units using $450 of materials and $1,400 of conversion cost

Week 3:

Demand	= 100 units @ $45
Beginning inventory	= 0
Production	= 110 units using $600 of materials and $1,700 of conversion cost

Required:

Question Content Area

1. Prepare a traditional income statement for each week.

Rivera Manufacturing, Inc. Traditional Income Statement

	Week 1	Week 2	Week 3
Change in inventoryConversion costCost of goods soldMaterialsSales	$- Select -	$- Select -	$- Select -
Change in inventoryConversion costCost of goods soldMaterialsSales	- Select -	- Select -	- Select -
Gross profit	$fill in the blank 46cd57072077ff2_9	fill in the blank 46cd57072077ff2_10	$fill in the blank 46cd57072077ff2_11

Question Content Area

2. Calculate the average value-stream product cost for each week. If required, round your answers to the nearest cent.

Week 1	$fill in the blank 5787e001aff9ff6_1 per unit
Week 2	$fill in the blank 5787e001aff9ff6_2 per unit
Week 3	$fill in the blank 5787e001aff9ff6_3 per unit

Question Content Area

3. Prepare a value-stream income statement for each week. Assume that any increase in inventory is valued at average cost. If an amount is zero, enter "0".

Rivera Manufacturing, Inc. Value-Stream Income Statement

	Week 1	Week 2	Week 3
Change in inventoryConversion costMaterialsSalesValue-stream profit	$- Select -	$- Select -	$- Select -
Change in inventoryCost of goods soldMaterialsSalesValue-stream profit	- Select -	- Select -	- Select -
Conversion costCost of goods soldChange in inventorySalesValue-stream profit	- Select -	- Select -	- Select -
Value-stream profit	$fill in the blank 212f03f9703307b_13	$fill in the blank 212f03f9703307b_14	$fill in the blank 212f03f9703307b_15
Change in inventoryConversion costMaterialsSalesValue-stream profit	- Select -	- Select -	- Select -
Gross profit	$fill in the blank 212f03f9703307b_20	$fill in the blank 212f03f9703307b_21	$fill in the blank 212f03f9703307b_22