23) Discuss the means by which a company goes about evaluating and installing a new quality improvement program. 24) Little Dog Unlimited makes small motorcycles. The monthly demand ranges from 80 to 100 motorcycles. The average demand is 92 motorcycles. The plant operates 300 hours a month. Each cycle takes approximately 1.5 hours. If the company adds a new line of scooters, initial demand will be 20 per month. Each scooter will take 1 hour to make. To offset approaching production capacity, expanding the assembly line is possible. This will decrease manufacturing time for all products by 20%. However, this […]

1) Regarding the means by which relevant costs and benefits are evaluated when evaluating quality improvement, the key question is: A) which alternative solution will make the customer happiest B) how total costs and total revenues will change under each alternative solution C) will the employees of the company be able to implement the change D) how long will it take for the improvement program to be fully functional Answer the following questions using the information below: Tri-State Manufacturing expects to spend $800,000 in 2012 in appraisal costs if it does not change its incoming materials inspection method. If it […]

7) The step-down allocation method: A) typically begins with the support department that provides the highest percentage of its total services to other support departments B) recognizes the total amount of services that support departments provide to each other C) allocates complete reciprocated costs D) offers key input for outsourcing decisions 8) The reciprocal allocation method: A) is the most widely used because of its simplicity B) requires the ranking of support departments in the order that the allocation is to proceed C) is conceptually the most precise D) results in allocating more support costs to operating departments than actually […]

23) Power Company has been unhappy with the financial accounting variances that its cost accounting system has been producing, because its managers believe that there is more to evaluating an operation than just examining accounting numbers. Therefore, it has started gathering data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of remote control units for televisions, radios, and stereo components: 20112012 Remote control units produced and sold80,000100,000 Direct manufacture labor-hours12,00013,200 Direct materials used (sets)80,600100,500 Direct manufacture cost per hour$18$20 Direct materials cost per set$31$32 Required: a.What is the partial productivity of […]

9.1   Identify the factors important to choosing the denominator level used to calculate fixed overhead allocation rates.   1) Using either the theoretical capacity or practical capacity as the denominator-level concept will result in the same production-volume variance.   2) Determining the “right” level of capacity is one of the most strategic and difficult decisions managers face.   3) Both theoretical and practical capacity measure capacity in terms of demand for the output.   4) Normal capacity utilization is the expected level of capacity utilization for the current budget period, which is typically one year.   5) Normal capacity utilization […]