Answer:
a. The positioning of the bite mark enhances the message 'No sin'.
Explanation:
Based on the popular story of Adam and Eve in the garden of Eden, where the two was said to have sinned against God, by eating or biting from the forbbiden fruit.
Thus, in this case, with the promotion for a brand of ketchup showing a part of the fruit that was bitten, is trying to link the popular Adam and Eve story to the picture, such that people or audience can easily remember the promotion and that biting or eating from the ketchup is not a sin.
Hence, positioning strategy that best explains the cognitive values is that, the positioning of the bite mark enhances the message 'No sin'.
Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.A. Prepare the journal entry necessary for recording the purchase of the new carpet.B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method.
Answer:
Entries are given below
Explanation:
Requirement A: Purchase of New Carpet on April 30
DEBIT CREDIT
Carpet $18,000
Cash 18,000
Requirement B: Depreciation Entry
Calculation
Annual Depreciation = 18000/15years = 1200
8 Monthths Depreciation = 1200 x 8/12 = 800
8 months = 1 May to Dec 31
DEBIT CREDIT
Depreciation Expense $800
Accumulated Depreciation $800
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $117,000. The machine's useful life is estimated to be 10 years, or 130,000 units of product, with a $3,000 salvage value. During its second year, the machine produces 10,400 units of product. Determine the machines' second year depreciation under the straight-line method.
Answer:
$11,400
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
( $117,000 - $3,000) / 10 = $11,400
the straight line depreciation method allocates the same depreciation expense for each year. so, the depreciation expense would be $11,400
The cost of units transferred from Work in Process Inventory to Finished Goods Inventory is called the cost of goods manufactured.
1. True
2. False
Answer:
1. True
Explanation:
Work in process inventory is inventory that is still undergoing processing. When the processing is completed, the goods (inventory) become finished goods. And they are transferred to Finished Goods Inventory as cost of goods manufactured. Finished Goods Inventory represents goods that are available for sale. The cost of finished goods inventory also forms part of the cost of goods sold, which is used in determining the gross profit. Accounting for work in process inventory is part of the multi-step system of accumulating and allocating cost of production to finished goods.
Can you explain answer below:
#28 The Canadian subsidiary of a U.S. company reported cost of goods sold of 50,000 C$, for the current year ended December 31. The beginning inventory was 15,000 C$, and the ending inventory was 10,000 C$. Spot rates for various dates are as follows:
Date beginning inventory was acquired $1.08 = 1C$
Rate at beginning of the year $1.10 = 1C$
Weighted average rate for the year $1.12 = 1C$
Date ending inventory was acquired $1.13 = 1C$
Assuming the Canadian dollar is the functional currency of the Canadian subsidiary, the translated amount of cost of goods sold that should appear in the consolidated income statement is
Answer is C. $56,000
Answer:
$56,000
Explanation:
Data:
Cost of good sold (single) = $50,000
Weighted average rate of the year = $1.12
Cost of good sold consolidated = ???????
Solution:
In order to find the translated amount of cost of goods sold that should appear in the consolidated income statement, we will multiply the cost of goods sold given for Canadian subsidiary with the weighted average rate of the year.
Calculation:
Cost of good sold (consolidated) = $50,000 x $1.12
Cost of good sold (consolidated) = $56,000
Epsilon Co. can produce a unit of product for the following costs:
Direct material $8.40
Direct labor 24.40
Overhead 42.00
Total costs per unit $74.80
An outside supplier offers to provide Epsilon with all the units it needs at $66.20 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to:
Buy since the relevant cost to make it is $74.80.
Make since the relevant cost to make it is $62.20.
Buy since the relevant cost to make it is $45.40.
Make since the relevant cost to make it is $45.40.
Buy since the relevant cost to make it is $62.20.
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Direct material $8.40
Direct labor 24.40
Overhead 42.00
Total costs per unit $74.80
Purchasing price= $66.20 per unit.
First, we need to determine the real production cost per unit. If 30% of overhead is not avoidable, we will take into account only 70% of overhead.
Total production cost per unit= 8.4 + 24.4 + (42*0.7)= $62.2
It is cheaper to make the unit. If the unit is produced, the company will save $4 per unit.
A manager recorded the performance review scores for each employee and placed the results in the bar chart below. All employees received a rating on each of the Evaluation Categories. If Person 6 obtained the highest score possible, what score did Person 2 receive
Answer and Explanation:
There are six people totaling on behalf of the Score
But as a person 2 scores as much as a person 6 scores And person 1 scores as much as a person 5 scores so for all six people we only need four different ranking categories.
As an individual 6 score thus the highest
There are two people Pers 2 and Individual 6 in Excellent Category
We can say that the highest score belongs to person 3 hence Person 3 categories as Good after them from the graph.
After him, the highest score goes to person 1 and person 5, since both score equal
While person 1 and person 5 appear at Category Fair
The last person who is a minimum score of Person 4 thus falls in Poor Category.
We can also see, as with the highest scorers (2 and 6), that a total of 9 squares (these none squares are counted separately by lines in the graph) if we take each line as 4 units.
Then Individual 2 scores 36
(The only probability divisible by 9 is here 36)
Thus we may claim that individual 2 comes with 36 points in Category Excellence.
Two cities are identical in all respects except City A has an assessment ratio of 100% and City B (in another state) has an assessment ratio of 25%. Both cities need to raise $1,000,000 in property tax revenues. The statutory tax rates on property are
Available Options are:
A. higher in City A than City B.
B. higher in City B than City A.
C. identical in both cities.
D. dependent on non-property tax revenues in each.
Answer:
Option B. Higher in the city B than in city A.
Explanation:
If we talk about the assessment ration, then it is calculated as under:
Assessment ratio = Value of property assessed by municipality / Fair Market value of the property
This ratio helps in calculating the property tax for each year and if the ratio is higher then the property tax rate will be set higher to collect the target property tax revenue and vice versa.
As in this case, the assessment ratio of company B is 100% which is higher than city A, which means that the city B will require higher tax rates to collect the target property tax revenue.
Hence the property tax rate in city B will be higher than City A to collect the same target property tax revenue.
Under absorption costing, a company had the following unit costs when 18,000 units were produced.
Direct labor $2
Direct material 3
Variable overhead 4
Total variable cost 9
Fixed overhead ($50,000/10,000 units) 5
Total production cost per unit $14
Required:
Compute the company's total production cost per unit if 12,500 units had been produced. Total production cost per unit.
Answer:
Total unitary cost= $13
Explanation:
Giving the following information:
Direct labor $2
Direct material 3
Variable overhead 4
Total variable cost= 9
Fixed overhead= $50,000
Units produed= 12,500
To calculate the total cost per unit, first, we need to calculate the unitary fixed overhead.
Unitary fixed overhead= 50,000/12,500= $4
Total unitary cost= 9 + 4= $13
What is the relationship between organizational needs analysis and strategic planning? How can tying HRD programs to an organization’s strategicplan make it easier to justify requests for resources to develop and deliver HRD programs?
Explanation:
An organization's strategic planning comprises the organizational values, its mission, vision and objectives and defines a company's strategic action plans in detail so that its long-term objectives and goals are achieved.
To be effective, strategic planning must understand each system in the organization and correctly allocate the use of resources according to the needs of the company.
The analysis of organizational needs will help the company to monitor its resources and its influence on the internal and external environment, developing ideal alternatives in a market where there are changes in consumer behavior, innovation, new technologies, etc.
The programs of the human resources department must therefore be linked to the strategic plan of an organization, to facilitate requests for resources to develop and provide HRD programs, since the needs of personnel directly impact the way in which the strategic actions foreseen by the planning are developed. Organizational culture should be based on positive values that seek to motivate employees to be productive and perform their duties with dedication and excellence, so HRD programs must be considered as an essential part of the development of the internal forces that will lead an organization to success.
True or False: Computing interest using the sum-of-the-digits method allocates more interest at the beginning of a loan than at the end of the loan.
Answer:
True
Explanation:
To illustrate how the sum-of-the-digits method allocates interest we can use a lease example:
You are the lessor and you will lease a machine during 4 years. The lease requires 4 equal payments of $100,000 at the beginning of the year. After the lease, the asset's salvage value = $0.
The asset's current value = $300,000, so total interests received = $100,000
Using the sum-of-the-digits method, you will allocate interest as follows:
year 1 = 3/6 x $100,000 = $50,000year 2 = 2/6 x $100,000 = $33,333year 3 = 1/6 x $100,000 = $17,000The largest portion of interests is allocated during the beginning of the loan.
The purchasing function, sometimes called ________, is an important part of any firm's production strategy.
Answer:
Procurement
Explanation:
The purchasing function, sometimes called procurement is an important part of any firm's production strategy. The role of procurement is simply to get goods and services for the business needs.
Procurement is the act of getting goods or services, for business purposes. It is generally the last act of purchasing.
g Donald’s employer fires Donald after only four months on the job, a clear breach of Donald’s written twelve-month employment contract. Donald is entitled to recover as damages:
Answer:
Compensatory Damages
Explanation:
Based on this scenario it can be said that Donald is entitled to Compensatory Damages. This is a lawsuit that covers the loss that the non-breaching party incurred as a result of the breach of contract. In this scenario, Donald's employer breached the contract by firing Donald before the twelve months. Therefore Donald can sue for compensatory damages which would be the amount of money that he would have made in the rest of the twelve months.
Suppose that you just purchased 150 shares of XYZ stock for $60 per share. a. If the initial margin requirement is 71.00%, how much money must you borrow?
Answer:
$2,610
Explanation:
Calculation for how much money you must borrow.
Using this formula
Amount to be borrowed =( Purchased shares* Per share price*(Initial margin requirement percentage)
Let plug in the formula
Amount to be borrowed= 150 shares*$60 per shares *(1-0.71)
Amount to be borrowed=$9,000*(0.29)
Amount to be borrowed=$2,610
Therefore how much money you must borrow will be $2,610
Windsor Corporation has retained earnings of $702,500 at January 1, 2017. Net income during 2017 was $1,426,500, and cash dividends declared and paid during 2017 totaled $83,200. Prepare a retained earnings statement for the year ended December 31, 2017. Assume an error was discovered: land costing $89,590 (net of tax) was charged to maintenance and repairs expense in 2014. (List items that increase retained earnings first.)
Answer:
The end of the year balance in retained earnings after correction of prior period error is $2,135,390
Explanation:
It is important to note that the error discovered has reduced retained earnings previously and by the time it is corrected retained earnings would increase by that amount of $89,590
Beginning retained earnings $702,500
net income for 2017 $1,426,500
dividends declared and paid in 2017 ($83,200)
correction of prior period error $89,590
Ending retained earnings $2,135,390
Matt's Machine Company has borrowed $10 million for four months at 5.5% APR, using inventory stored in a field warehouse as collateral. The warehouse fee is 0.5%, payable at the beginning of the loan. What is Matt's EAR?
Answer:
The Matt's EAR is 7.24%
Explanation:
The money borrowed by the company (L) = $10 million
Time period for the loan (T) = 4 months
Rate given (APR) = 5.5%
Per Month rate R=5.5%/12=0.46%
The fee of warehouse that is paid at the starting of the loan = 0.5%
Now we have to calculate the Matt’s EAR.
Warehouse fees =0.5%
So Fees F= 0.5% × L = 0.5% × $10 = $0.05 millions
Therefore, the Net amount we get N = L – F = 10 - 0.5 = $9.95 millions
Assume r be the per month EAR
N*(1+r)^4 = L*(1+R)^4
9.95*(1+r)^4 = 10*(1+0.46%)^4
r=0.58%
EAR =(1+r)^12-1= (1+0.58%)^12-1 = 7.24%
Retirement Investment Advisors, Inc., has just offered you an annual interest rate of 4.1 percent until you retire in 45 years. You believe that interest rates will increase over the next year and you would be offered 4.7 percent per year one year from today. If you plan to deposit $11,500 into the account either this year or next year, how much more will you have when you retire if you wait one year to make your deposit
Answer:
If you wait one year, in 45 years you will have $16,624.04 more than investing today.
Explanation:
Giving the following information:
Option 1:
Initial investment= $11,500
Number of years= 45
Interest rate= 4.1%
Option 2:
Initial investment= $11,500
Number of years= 44
Interest rate= 4.7%
To calculate the future value for both options, we need to use the following formula:
FV= PV*(1+i)^n
Option 1:
FV= 11,500*(1.041^45)= $70,142.41
Option 2:
FV= 11,500*(1.047^44)
FV= $86,766.45
If you wait one year, in 45 years you will have $16,624.04 more than investing today.
A corporation that uses the equity method of accounting for its investment in a 40%-owned investee (that earned $20,000 and paid $5,000 in dividends) made the following entries: Investment in investee $8,000 Investment Income $8,000 Investment in investee $2,000 Cash $2,000 What effect will these entries have on the investor’s statement of financial position?
Answer:
Investment in the investee will be overstated, retained earnings will be overstated.
Explanation:
The effect on the investor’s statement of financial position is shown below:-
Because the investor owns more than 30 percent of the equity approach has to be used. This will result in overestimated investments of $8,000 which comes from $20,000 × 40 percent in investee, which will also result in overestimated retained earnings of $8,000 which comes from $20,000 × 40 percent
Garcia Company has 10,400 units of its product that were produced last year at a total cost of $156,000. The units were damaged in a rainstorm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $3 each or it can repair the units at a total cost of $18,400 and then sell them for $7 each. Calculate the incremental net income if the units are repaired
Answer:
$23,200
Explanation:
Alternative 1 Alternative 2 Incremental
no repairs repair units revenue
sales revenue $31,200 $0 ($31,200)
repair costs $0 -$18,400 ($18,400)
revenue from $0 $72,800 $72,800
selling repaired units
total $23,200
Incremental revenues refer to the extra or additional revenues generated by a business activity or transaction. In this case, repairing and then selling the damaged units would increase income by $23,200.
Chamberlain Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6 percent coupon bonds on the market that sell for $1,083, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?
Answer:
5.36%
Explanation:
We would need to calculate the yield to maturity of the current bonds:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
coupon = $1,000 x 6% x 1/2 = $30face value = $1,000market value = $1,083n = 20 x 2 = 40YTM = {$30 + [($1,000 - $1,083)/40]} / [($1,000 + $1,083)/2] = $27.925 / $1,041.50 = 0.026812 x 2 = 0.05362 = 5.36%
Since the bond's coupon rate is higher than the market rate, the bonds are sold at a premium. In order to sell bonds at the par value, you must lower the coupon rate.
"The conversion ratio of these convertible debentures is set at issuance at 200:1. The trust indenture for the debentures includes an "anti-dilutive" covenant. The company wants to issue 50,000 additional common shares. The conversion price after the issuance of the additional common shares will be:"
Answer:
$4
Explanation:
The conversion price of the convertible bonds set at issuance was $5 per share ($1000 par/200 conversion ratio). If the company issues more common shares, the market value of outstanding shares will fall. For instance, if the common stock price is trading at $5, Therefore, the bond and the common are at parity. If 25% more share isnissued by the company as it does in the aforementioned example -- there would be $1000000 share of common at $5 par or 200000 shares outstanding and the company intends to share 50000 more shares, or 25% more), the adjusted conversion price of the stock after issuance will now become $5/1.25 = $4 per share.
Nonetheless, i the conversion isn't being adjusted, the convertible security which was "at the money" goes "out the money". The protect convertible security holders, an anti-dilutive covenant is included in the trust indenture. The conversion price is adjusted for these dilutive effects. The new conversion pricewill be $5 original price/1.25 = $4
Years ago, a bond was issued at par with a 7% coupon. This year, new issue bonds of similar credit quality are being issued at 10%. Which statement is TRUE
Answer: A. The new bonds will be issued at a premium to the current price of the 7% bonds
Explanation:
The New Bonds will have a coupon of 10% which will be higher than the 7% that was previous on offer for the same type of bonds.
This means that the same type of bond is giving a greater return than before. Investors will therefore want more of the bond giving out better returns and will not mind paying a higher price to get it.
For this reason, the bonds issued this year with a 10% coupon will sell at a Premium (higher than) the bonds that were issued years ago that only have a coupon rate of 7%.
In a long-run equilibrium where firms have identical costs, it is possible that some firms in a competitive market are making a positive economic profit. True or False
Answer: False
Explanation:
In the long run, if there are still firms making an Economic profit, this would encourage other firms to enter the market. Once this happens the firms would stop making an Economic profit. Should they start making an economic loss, some firms would leave the market which would then bring the Economic losses to zero.
Marigold Corporation acquires a coal mine at a cost of $420,000. Intangible development costs total $105,000. After extraction has occurred, Marigold must restore the property (estimated fair value of the obligation is $84,000), after which it can be sold for $168,000. Marigold estimates that 4,200 tons of coal can be extracted.
Required:
If 735 tons are extracted the first year, prepare the journal entry to record depletion.
Answer:
Inventory Dr $77,175
To Accumulated depletion $77,175
(being the depletion is recorded)
Explanation:
The journal entry is shown below:
Inventory Dr $77,175
To Accumulated depletion $77,175
(being the depletion is recorded)
For recording this we debited the inventory as it increased the assets and credited the accumulated depletion as it decreased the assets
The computation is shown below:
= (Cost of coal mine + intangible development cost + estimated fair value of the obligation - sales value) ÷ (extracted estimated tons) × (extracted tons for the first year)
= ($420,000 + $105,000 + $84,000 - $168,000) ÷ (4,200 tons) × (735 tons)
= $77,175
Time Remaining 1 hour 48 minutes 56 seconds01:48:56 Item 5Item 5 Time Remaining 1 hour 48 minutes 56 seconds01:48:56 Accounts payable are: Multiple Choice Amounts received in advance from customers for future services. Always payable within 30 days. Estimated liabilities. Amounts owed to suppliers for products and/or services purchased on credit.
Answer:
Amounts owed to suppliers for products and/or services purchased on credit.
Explanation:
Accounts payable are basically short term debts that a company has with its suppliers. E.g. a retailer purchases goods from a wholesaler on terms n/30. In this case, the accounts payable would be the amount of money owed to the retailer. There is no specific time frame for an accounts payable, since it varies depending on the credit that the supplier gives. E.g. sometimes a supplier will sell on a 45 day credit period, or even 60 day period.
Given the following items and costs as of the balance sheet date, determine the value of Light Company's merchandise inventory.
- $2,400 goods sold by Light to another company. The goods are in transit and shipping terms are FOB shipping point.
- $3,400 goods sold by another company to Light. The goods are in transit and shipping terms are FOB shipping point.
- $4,400 owned by Light but in the possession of another company, the consignee.
- Damaged goods owned by Light that originally cost $5,400 but now have an $1,200 net realizable value.
Answer:
Light Company
Merchandise Inventory:
Goods $2,400 sold on FOB shipping point = $0
Goods $3,400 bought on FOB shipping point = $3,400
Goods $4,400 on consignment = $4,400
Goods $5,400 with net realizable value of $1,200 = $1,200
Value of inventory owned by Light Company = $9,000
Explanation:
a) Goods $2,400 sold on FOB shipping point: FOB shipping point means Free on Board shipping point. This trade term specifies when ownership right is established, that it is at the shipping point and not the destination of the goods when the buyer takes possession. The ownership was transferred to customer at shipping point with all risks and benefits. They no longer belong to Light and are therefore not part of Light's inventory after the shipment.
b) Goods $3,400 bought on FOB shipping point: As explained above, the ownership right and obligation were transferred at shipping point. The goods belong to Light as it is the lawful owner based on the shipping term.
c) Goods $4,400 on consignment: Goods on consignment do not belong legally to consignee though they are at his physical possession. They belong to the consignor until they are sold to a third party.
d) Goods $5,400 with net realizable value of $1,200: The value of an item is not actually the cost but what it can be sold for. This is especially so for an item that had previously suffered some damage. The net realizable value is therefore to be used to account for the damaged goods so that profit is not overstated.
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are also willing to sell at the same prices. How many transactions must the market maker make if he wants to maximize his profits?
Answer:
maximum profit ($30 in total) is obtained by selling 5 units
Explanation:
if the market maker buys and sells one unit, his/her profit = $15 - $5 = $10 if the market maker buys and sells two units, his/her profit = $10 + ($14 - $6) = $18 if the market maker buys and sells three units, his/her profit = $18 + ($13 - $7) = $24 if the market maker buys and sells four units, his/her profit = $24 + ($12 - $8) = $28 if the market maker buys and sells five unit, his/her profit = $28 + ($11 - $9) = $30the maximum profit per unit is obtained by selling only 1 unit, but the total maximum profit is obtained by selling 5 units.
Parramore Corp has $17 million of sales, $3 million of inventories, $4 million of receivables, and $3 million of payables. Its cost of goods sold is 65% of sales, and it finances working capital with bank loans at an 6% rate. Assume 365 days in year for your calculations. Do not round intermediate steps.
What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.
days
Answer:
Parramore's cash conversion cycle (CCC) is 85.88 days.
Explanation:
The cash conversion cycle (CCC) refers to a metric that is used to express the time or number of days a firm takes to convert its inventory and other investments resources into cash flows from sales.
CCC has three components: Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO). CCC can therefore be calculated using these three components as follows:
CCC = DIO + DSO - DPO ........................... (1)
We need to calculate each of these components first as follows:
DIO = (Inventories / Cost of good sold) * 365 = [3 / (65% * 17)] * 365 = 99.0950226244344
DSO = (Receivables / Sales) * 365 = (4 / 17) * 365 = 85.8823529411765
DPO = (Payable / Cost of good sold) * 365 = [3 / (65% * 17)] * 365 = 99.0950226244344
Substituting all the values into equation (1), we have:
CCC = 99.0950226244344 + 85.8823529411765 + 99.0950226244344 = 85.88 days.
Therefore, Parramore's cash conversion cycle (CCC) is 85.88 days. That is, it takes Parramore Corp 85.88 days to convert its inventory and other investments resources into cash flows from sales.
Suppose that the presidents of two auto manufacturing companies exchange text messages in which they discuss jointly raising prices on their new lines of hybrid SUVs. Which law does this illegal communication violate?
Answer:
Sherman Antitrust Act of 1890
Explanation:
Based on the information provided within the question it can be said that this communication is violating the Sherman Antitrust Act of 1890. This Act was passed prohibiting any contract, trust, or conspiracy in restraint of interstate or foreign trade in order to prevent oppressive business practices and monopolies. This is what the two companies are doing by agreeing to jointly raise the price they are able to control the entire markets price thus creating a monopoly in the automotive industry, which forces consumers to pay a lot more than what the vehicles are actually worth.
A company purchased a commercial dishwasher by paying cash of $5,300. The dishwasher's fair value on the date of the purchase was $5,700. The company incurred $320 in transportation costs, $210 installation fees, and paid a $230 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher
Answer:
$5,830
Explanation:
Relevant data provided
Cash paid = $5,300
Transportation cost = $320
Installation fees = $210
The computation of the amount that will record the dishwasher is shown below:-
Total cost = Cash paid + Transportation cost + Installation fees
= $5,300 + $320 + $210
= $5,830
Therefore for computing the total cost we simply applied the above formula and ignore all other values as they are not relevant.
"A production line is currently organized so that all parts go through an initial tuning" process. Each part that exits the tuning process goes to either inspector A or inspector B. Currently 50 parts per hour goes into the tuning station, 40% of which will later be sent to inspector A and 60% will be sent to inspector B. Each inspected part exits the inspection process either with a "pass" or "fail" result. Both inspectors reject about 30% of all units inspected.
On average there are 30 units at the tuning station, 20 units at inspector A’s station, and 25 units at inspector B’ station. Assume that we have a stable process throughout.
a. What is the process flow time?
b. What is the average flow time of parts that go through inspector B?
c. What is the average flow time of parts that will pass the inspection?
d. Assume that the company above competes in an industry where high volume is an order qualifier. Use little’s law to explain specifically what the firm should focus on if it wants to have better flow time performance.
Answer:
a. The process flow time is 1.50 hours
b. The average flow time of parts that go through inspector B is 1.433 hours
c. The average flow time of parts that will pass the inspection=1.5 hours
d. To have a better flow time performance the ideal thing would be to have more quantity produced
Explanation:
a. In order to calculate the process flow time we would have to calculate the following formula:
process flow time=percentage of parts which will later be sent to inspector A*(tunning flow time+1)+percentage of parts which will later be sent to inspector B*(tunning flow time+B flow time)
process flow time=40%*(0.6+1) + 60%*(0.6+0.833)
process flow time= 1.50 hours
The process flow time is 1.50 hours
b. In order to calculate the average flow time of parts that go through inspector B we would have to calculate the following formula:
average flow time of parts that go through inspector B=flow time tunning+flow time B
average flow time of parts that go through inspector B=0.60+0.833
average flow time of parts that go through inspector B= 1.433 hours
c. In order to calculate the average flow time of parts that will pass the inspection we would have to calculate the following formula:
average flow time of parts that will pass the inspection=number will pass of A*(tunning flow time+1)+number will pass of B*(tunning flow time+ flow time B)
average flow time of parts that will pass the inspection=(14/35)*(0.6+1) + (21/35)*(0.6+0.833)
average flow time of parts that will pass the inspection=1.5 hours
d. To have a better flow time performance the ideal thing would be to have more quantity produced