Exam 13: Strategic Cost Management

Which of the following is considered a direct product cost if JIT manufacturing is used and each manufacturing cell produces a single product?

Which of the following is a trait of a JIT system?

Prior to installing a JIT system, Reilly Company used machine hours to assign maintenance costs to its three products of 4-cm, 6-cm, and 9-cm insulation. The maintenance costs totalled $420,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: 4 6,000 15,000 6 10,000 12,500 9 8,000 11.200 After installing JIT,three manufacturing cells were created and the cell workers were trained to perform maintenance.Maintenance costs for the three cells still totalled $420,000; however,these costs are now traceable to each cell. Cell 4 \ 110,000 Cell, 6 150,000 Cell 9 160,000 -Refer to the figure.What would be the maintenance cost per roll of 4-cm insulation before JIT is installed?

What is the operational activity of redesigning products classified as?

Which of the following manufacturing costs is assigned to products in a traditional and JIT environment using direct tracing?

What is the term for the relationships among activities that are performed with a firm's portion of the value chain?

What does the industrial value-chain analysis determine?

At which stage of the consumable life-cycle is price sensitivity low?

What is a computer manufacturing company focusing on when it addresses supplier production problems?

Prior to installing a JIT system, Reilly Company used machine hours to assign maintenance costs to its three products of 4-cm, 6-cm, and 9-cm insulation. The maintenance costs totalled $420,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: 4 6,000 15,000 6 10,000 12,500 9 8,000 11.200 After installing JIT,three manufacturing cells were created and the cell workers were trained to perform maintenance.Maintenance costs for the three cells still totalled $420,000; however,these costs are now traceable to each cell. Cell 4 \ 110,000 Cell, 6 150,000 Cell 9 160,000 -Refer to the figure.What is the maintenance cost per roll of 6-cm insulation after installing JIT?

What philosophy of quality control does traditional manufacturing use?

Prior to installing a JIT system,Charlotte Company used machine hours to assign maintenance costs to its three products of 4-cm,6-cm,and 8-cm plastic pipe. The maintenance costs totalled $120,000 per year.The machine hours used by each product and the quantity produced of each product are as follows: 4 1,000 400 6 1,500 450 8 2.500 1.250 After installing JIT,three manufacturing cells were created and the cell workers were trained to perform maintenance.Maintenance costs for the three cells still totalled $120,000; however,these costs are now traceable to each cell. Cell, 4 \1 8,000 Cell, 6 31,500 Cell, 8 70,500 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.

A firm that has implemented JIT had the following transactions: 1. Materals were purchased an account for $50,000 2. Materials were placed inta production. 3. Actual direct labour costs were $16,000. 4. Actual averhead costs were $30,000. 5. Conversion costs applied were $52,000. 6. All work was completed for the month. 7. All completed work was sald. 8. The variance is recoprized. -Refer to the figure.What will be the entry to record materials placed into production using the back flush approach?

What is the operational activity of inspecting classified as?

Etro Company sells a product used in many manufacturing processes.The sales activity involves three activity areas: Artivity Area Cost Driver and Rate Order taking \ 100 per purchase order Sales visits \ 50 per visit Delivery vehicles \ 1 per delivery kilometre Product handling \ 0.05 a unit Special runs \ 300 per run The following customer information is given: A B D Units sold 100,000 80,000 60,000 List price \ 50 \ 50 \5 0 Actual sales price \ 45 \ 48 \5 0 Number of purchase orders 30 20 10 Number of sales visits 6 5 3 Number of deliveries 10 8 6 Kilometres travelled per delivery 40 5 20 Number of special runs 1 0 1 What is the profitability of customer B?

Todd Corporation sells a product for $400 per unit.Its market share is 22 percent of the units sold.The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction in price to $340.The product is currently earning a profit of $64 per unit.The president of Todd Corporation feels that his company needs to maintain the same profit level per unit.The market share consists of $4,000,000 (10,000 units). a.How many units does Todd Corporation currently sell of the product? b.What is the target price per unit? c.What is the original cost per unit? d.What is the target cost per unit?

Hank Stover,president of Stover Industries,had just completed examining a projected profit summary for two components that would be used in televisions.Both units were still in a very preliminary planning stage,and a decision had to be made regarding their continued viability.The components would be developed,produced,and sold at the same time.Each product's life cycle is 40 months.The projected profit performance of the two items promised a return on sales of 10 percent-less than the 14 percent rate set by company standards.From the statements below,it appeared to Hank that the culprit was Component 402 because its gross profit percentage was much lower than that of Component 401. Sales \ 500,000 \ 500,000 \1 ,000,000 Cost of goods sold Gross profit \4 00,000 Research and development (230,000) Selling expenses Profit before taxes a.Explain why Hank may be wrong in his assessment of the relative performances of the two products.What change in the company's life-cycle budgeting approach would you suggest? b.Suppose that 75 percent of the research and development and 75 percent of the selling expenses are traceable to Component 401.Prepare budgeted life-cycle income statements for each product and calculate the return on sales.What does this tell you about the importance of accurate life-cycle budgeting?

What strategy is a computer company following when it selects a mix of strategies in order to create sustainable competitive advantage?

What do identifying profitable and unprofitable customers exploit?

What is the goal of total quality control?