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Appendix B Homework (Application) Book Calculator Decision Making Lasting Memories Inc. produces photographic paper for printing digital images. One of the processes for this operation is a coating (solvent spreading operation, where chemicals are coated onto peper stock. There has been some concern about the cost performance of this operation. As a result, you have begun an investigation. You first discover that all materials and conversion prices have been stable for the last six months. Thus, increases in prices for inputs are not an explanation for increasing costs. However, you have discovered three possible problems from some of the operating personnel whose quotes follow: Operator 11 I've been keeping an eye on my operating room instruments. I feel as though our energy consumption is becoming less efficient. Operator 21 "Every time the coating machine goes down, we produce waste on shutdown and subsequent startup. It seems like during the last half year we have had more umscheduled machine shutdowns than in the past. Thus, I feel as though our yields must be dropping." Operator: 'My sense is that our coating costs are going up. It seems to me like we are spreading a thicker coating than we should. Perhaps the coating machine needs to be recalbrated." The Coating Department had no beginning or ending inventories for any month during the study period. The following data from the cost of production report are made available: F April May June July August September Paper stock $72,960 500,120 576,800 $60,120 565,200 $61.400 Coating $16,416 $19,250 $21,120 $21,000 $21.210 $23,040 Conversion cost (incl. energy $36,480 534,560 538,400 $34,560 532,640 $30,720 Pounds input to the process 95.000 90,000 100,000 90,000 $5,000 80,000 Pounds transferred out 91,200 86,400 96,000 86,400 1,600 76,800 B C D Complete the table showing the paper cost per output pound, coating cost per output pound, conversion cost per output pound, and yield for each month Round dollar amounts to the nearest cent Previous Oh My Vion Appendix B Homework (Application) Book Calculator Decision Making Lasting Memories Inc. produces photographic paper for printing digital images. One of the processes for this operation is a coating (solvent spreading operation, where chemicals are coated onto peper stock. There has been some concern about the cost performance of this operation. As a result, you have begun an investigation. You first discover that all materials and conversion prices have been stable for the last six months. Thus, increases in prices for inputs are not an explanation for increasing costs. However, you have discovered three possible problems from some of the operating personnel whose quotes follow: Operator 11 I've been keeping an eye on my operating room instruments. I feel as though our energy consumption is becoming less efficient. Operator 21 "Every time the coating machine goes down, we produce waste on shutdown and subsequent startup. It seems like during the last half year we have had more umscheduled machine shutdowns than in the past. Thus, I feel as though our yields must be dropping." Operator: 'My sense is that our coating costs are going up. It seems to me like we are spreading a thicker coating than we should. Perhaps the coating machine needs to be recalbrated." The Coating Department had no beginning or ending inventories for any month during the study period. The following data from the cost of production report are made available: F April May June July August September Paper stock $72,960 500,120 576,800 $60,120 565,200 $61.400 Coating $16,416 $19,250 $21,120 $21,000 $21.210 $23,040 Conversion cost (incl. energy $36,480 534,560 538,400 $34,560 532,640 $30,720 Pounds input to the process 95.000 90,000 100,000 90,000 $5,000 80,000 Pounds transferred out 91,200 86,400 96,000 86,400 1,600 76,800 B C D Complete the table showing the paper cost per output pound, coating cost per output pound, conversion cost per output pound, and yield for each month Round dollar amounts to the nearest cent Previous Oh My Vion

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