Cbf Essay

1. State the business case for option #3, the PCB In-sourcing proposal. What is the benefit? What is the risk? How do you compare this proposal to option #1 and #2?

Consolidated Company makes cardboard boxes. During the most recent accounting period Consolidated paid $60,000 for raw materials, $48,000 for labor, and $52,000 for overhead costs that were incurred to make boxes. Consolidated started and completed 400,000 boxes. Based on this information, what is the average manufacturing cost per box?

Explanation: As per the information given, during a one week period, Catawba Industrial can generate a capacity of 24 units of the standard compressors.

Only in the stitching section there are inventories between different groups’ work. If the company still keeps each batch’s size as 100 pairs, the average work load for each worker in work group 1 now is 25 pairs, but in work group 2 is only 20 pairs which means that there will be 5 pairs of shoes as inventories from work shop 1 to work shop 2 in the stitching section.

Revenue maximization:Our strategy main for round one was to focus on maximizing revenue. We did not want the revenue to ever drop from $1000, so we took action based on the utilization rates of the machines. We needed to have sufficient capacity to maintain lead times of less than a day and at most, 1 day and 9 hours. Based on the linear decrease in revenue after a lead time of one day, it takes 9 hours for the revenue to drop to $600 and our profits to be $0. In terms of when to purchase machines, we decided that buying machines as early as possible would be ideal as there was no operating costs after the initial investment in the machine. Having more machines seemed like a win-win situation since it does not

The manager of Shamrock Manufacturing plans replacing of large piece of manufacturing equipment that the company uses in a production process with a more efficient model. The replacement of 3-years old equipment promises reducing the direct manufacturing and electricity costs. The manager of the plant hesitates replacing because the next year he expects promotion in larger Houston plant and the fright that he will he will reduce the operating income.

18. Purchasing costs are allocated based on parts used, and I.T. costs are allocated based on the number of transactions. Total IT costs to be allocated is expressed by which of the following equations:

Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.

| * The problem is the new manufacturing system installed in the plant requires trained workers to successfully operate the machine and at the time the new section is scheduled to open only 4 out of 16 workers will have experience. * Having untrained workers will increase the rejection rate for output of production.

Secondly, the company is still unsure when added capacity of the new machine would be needed. The old machines currently operate at only 90 percent of capacity. The projection as to how much capacity of the new machine will be utilized, will have a

During the month, the company purchased an additional $68,000 of raw materials. During May, $92,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $5,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total:

A Make-or-Buy Decision at Baxter Manufacturing Company Scenario Summary Baxter Manufacturing Company (BMC) is a leader in deep-drawn stampings. It has been in business since 1978 as a privately held company. The process for making these stampings is very involved and complex. BMC developed methods for efficiently producing large volumes of stampings while keeping their quality very high. BMC uses state of the art machines to make the stampings and they make all the tooling necessary for those machines. In the years since their founding, many changes have impacted the industry – especially when it comes to computer networks and software. In the 1980s many of BMC's customers went to Just In Time

ii.       Production capacity = 480 / 0.5 = 960 units per day @ continuous 100% utilization

Since 2008, Bergerac had been exploring the opportunity to begin its own production of cartridge components. Plastic suppliers like GenieTech and Elsinore faced difficulties in responding to demand spikes, leading to production delays. Such supplier unreliability made it challenging for Bergerac to optimize its cartridge production. Thus, the company had to carry more inventory of parts and finished goods than Wyckoff could have liked. The obvious appeal to fully control the supply of plastic lead to a strategy, the company has to decide whether to buy or build this capability. GenieTech owner was interested in retirement and was willing to sell the company for a purchase price of $5.75 million. GenieTech has 8 molding presses each could produce 5 cartridges per cycle with a total capacity of 10,782,720 cartridges per year with 5 days production in a week. The other alternative is to build a unit with 4 molding presses which are more efficient than the presses at GenieTech. The total capacity of the unit will be 6,097,371cartridges per year with 5 days production in a week. It is required to predict the best long term decision among the buy and build options.

Setup for the machine is done for one batch of items. If we look at the the batch size of valves, it will be 375 units(=7500 units/ 20 production runs)