rapter 04 emiwan Calouator Book value Added and Non Vale Added Costs, Unused Capacity For Situations 1 through 6, provide the follewing information a An estimate of the nenvalue-added oost caused by each activity b. The root causes of the activity cost (such as plant layout, process design, and product design). The appropriate cost reduction meaiure: actvity elimination, activity reduction, activity sharing, or activity selection Choose Mutiple in the Root cause column, wherever there is more than one root cause. If required, round your answers to the nearest deler 1 It takes 45 minubes and six pounds of material to produce a product using a tradiional manufacturing process. A process reengineering study provided a new manufacturing process design (using existing technology) that would take 15 minutes and four pounds of material. The cost per labor hour is $12, and the cost per pound of material is $8 2. With its original design, a product requires 15 hours of setup time. Redesigning the product could reduce the setup time to an absolute minimum of 30 minutes. The cost per hour of setup time is $200 3. A product currently requires eight moves By redesigning the manufacturing layout, the number of moves can be reduced frem eight to zere The cost per move is $10. 4 Inspection time for a plant is 8,000 heurs per year. The cost of inpedon domsists of salares of four geclrk lotaing S12 program, product redesign, and process redesign reduced the need for inspection by creating a rero-defect envion 20,000. spection also uses supplies costing $2 per inspection hour A supplier evaluation 5. tach unit of a preduct requires fve components. The average number of components is 5.3 due to companent failure, requiring rework and extra components. By developing relations with the right suppliers and increasing the quality of the purchased component, the average number of components can be reduced to ve components per unt. The cest per component is s600 6. A plant produces 100 different electronic products. Each product requires an average of eight components that are purchased extemaly The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have four components in cammon. This will reduce the demand for purchasing, receiving, and paying bills Etstimated savings from the reduced demand are s900,000 per year Case Non-Value-Added Cost Root Cause Cost Reduction per unt Multiple X Activity reduction X Product design Activity reduction per setup Activity ellimination Multiple per unit Multiple per year Activity selection x Activity selection per unit Process design X Multiple X per year Activity selection X Check My W 2 more Che y Wok unesmainings Prinus Chapter 04 Homework Value-Added and Non-Value-Added Costs, Unused Capacity For Situations 1 through 6, provide the following information: a. An estimate of the non-value-added cost caused by each activity b. The root causes of the activity cost (such as plant layout, process design, and product design). c. The appropriate cost reduction measure: activity elimination, activity reduction, activity sharing, or activity selection. Choose Multiple" in the Root cause column, wherever there is more than one root cause. If required, round your answers to the nearest dollar. 1. It takes 45 minutes and six pounds of material to produce a product using a traditional manufacturing process. A process reengineering study provided a new manufacturing process design (using existing technology) that would take 15 minutes and four pounds of material. The cost per labor hour is $12, and the cost per pound of material is $8. 2. With its original design, a product requires 15 hours of setup time. Redesigning the product could reduce the setup time to an absolute minimum of 30 minutes. The cost per hour of setup time is $200. 3. A product currently requires eight moves. By redesigning the manufacturing layout, the number of moves can be reduced from eight to zero. The cost per move is $10 4. Inspection time for a plant is 8,000 hours per year. The cost of inspection consists of salaries of four inspectors, totaling $120,000. Inspection also uses supplies costing $2 per inspection hour. A supplier evaluation program, product redesign, and process redesign reduced the need for inspection by creating a zero-defect environment. 5. Each unit of a product requires five components. The average number of components is 5.3 due to component failure, requiring rework and extra components. By developing relations with the right suppliers and increasing the quality of the purchased component, the average number of components can be reduced to five components per unit. The cost per component is $600. 6. A plant produces 100 different electronic products. Each product requires an average of eight components that are purchased externally. The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have four components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated > savings from the reduced demand are $900,000 per year. Case Non-Value-Added Cost Root Cause Cost Reduction Multiole X Activitv reduction X 1 ner unit Check My Work 2 more Check My Work uses remaining. Previous Next Chapter 04 Homework 5. Each unit of a product requires five components. The average number of components is 5.3 due to component failure, requiring rework and extra components. By developing relations with the right suppliers and increasing the quality of the purchased component, the average number of components can be reduced to five components per unit. The cost per component is $600. 6. A plant produces 100 different electronic products. Each product requires an average of eight components that are purchased externally. The components are different for each part. By redesigning the products, it is possible to produce the 100 products so that they all have four components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand are $900,000 per year Non-Value-Added Cost Case Root Cause Cost Reduction 1 per unit Multiple X Activity reduction X Product design Activity reduction per setup 3 Multiple X Activity elimination per unit 4 Multiple per year Activity selection X Activity selection S 5 Process design X per unit 6 Multiple X per year Activity selection X Feedback Y Check My Work (AQ (Actual Quantity) SQ) x SP a. Non-value-added costs b. Choose a root cause of the cost for each situation. c. Choose the appropriate cost reduction for each situation. Check My Work 2 more Check My Work uses remaining. Previous Next