ACCT 241 Week 11 Assignment Help 3 | American University
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- 09 Aug 2019
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ACCT 241 Week 11 Assignment Help 3 | American University
1.
DataSpan,
Inc., automated its plant at the start of the current year and installed a
flexible manufacturing system. The company is also evaluating its suppliers and
moving toward Lean Production. Many adjustment problems have been encountered,
including problems relating to performance measurement. After much study, the
company has decided to use the performance measures below, and it has gathered
data relating to these measures for the first four months of operations.
|
|
Month |
|||||||
|
|
1 |
|
2 |
|
3 |
|
4 |
|
|
Throughput
time (days) |
? |
|
? |
|
? |
|
? |
|
|
Delivery
cycle time (days) |
? |
|
? |
|
? |
|
? |
|
|
Manufacturing
cycle efficiency (MCE) |
? |
|
? |
|
? |
|
? |
|
|
Percentage
of on-time deliveries |
91 |
% |
86 |
% |
83 |
% |
79 |
% |
|
Total
sales (units) |
3,210 |
|
3,072 |
|
2,915 |
|
2,806 |
|
|
|
||||||||
Management
has asked for your help in computing throughput time, delivery cycle time, and
MCE. The following average times have been logged over the last four months:
|
|
Average
per Month (in days) |
||||||||
|
|
1 |
2 |
3 |
4 |
|||||
|
Move
time per unit |
0.4 |
|
0.3 |
|
0.4 |
|
0.4 |
|
|
|
Process
time per unit |
2.1 |
|
2.0 |
|
1.9 |
|
1.8 |
|
|
|
Wait
time per order before start of production |
16.0 |
|
17.5 |
|
19.0 |
|
20.5 |
|
|
|
Queue
time per unit |
4.3 |
|
5.0 |
|
5.8 |
|
6.7 |
|
|
|
Inspection
time per unit |
0.6 |
|
0.7 |
|
0.7 |
|
0.6 |
|
|
|
|
|||||||||
Required:
1-a.
Compute the throughput time for each month.
1-b.
Compute the delivery cycle time for each month.
1-c.
Compute the manufacturing cycle efficiency (MCE) for each month.
2.
Evaluate the company’s performance over the last four months.
3-a.
Refer to the move time, process time, and so forth, given for month 4. Assume
that in month 5 the move time, process time, and so forth, are the same as in
month 4, except that through the use of Lean Production the company is able to
completely eliminate the queue time during production. Compute the new throughput
time and MCE.
3-b.
Refer to the move time, process time, and so forth, given for month 4. Assume
in month 6 that the move time, process time, and so forth, are again the same
as in month 4, except that the company is able to completely eliminate both the
queue time during production and the inspection time. Compute the new
throughput time and MCE.
2.
Financial
data for Joel de Paris, Inc., for last year follow:
|
Joel de
Paris, Inc. |
||||||
|
|
Beginning |
|
Ending |
|||
|
Assets |
||||||
|
Cash |
$ |
140,000 |
|
$ |
120,000 |
|
|
Accounts
receivable |
|
450,000 |
|
|
530,000 |
|
|
Inventory |
|
320,000 |
|
|
380,000 |
|
|
Plant
and equipment, net |
|
680,000 |
|
|
620,000 |
|
|
Investment
in Buisson, S.A. |
|
250,000 |
|
|
280,000 |
|
|
Land
(undeveloped) |
|
180,000 |
|
|
170,000 |
|
|
Total
assets |
$ |
2,020,000 |
|
$ |
2,100,000 |
|
|
Liabilities
and Stockholders' Equity |
||||||
|
Accounts
payable |
$ |
360,000 |
|
$ |
310,000 |
|
|
Long-term
debt |
|
1,500,000 |
|
|
1,500,000 |
|
|
Stockholders'
equity |
|
160,000 |
|
|
290,000 |
|
|
Total
liabilities and stockholders' equity |
$ |
2,020,000 |
|
$ |
2,100,000 |
|
|
|
||||||
|
Joel de
Paris, Inc. |
|
|||||||
|
Sales |
|
|
|
|
$ |
4,050,000 |
|
|
|
Operating
expenses |
|
|
|
|
|
3,645,000 |
|
|
|
Net
operating income |
|
|
|
|
|
405,000 |
|
|
|
Interest
and taxes: |
|
|
|
|
|
|
|
|
|
Interest
expense |
$ |
150,000 |
|
|
|
|
|
|
|
Tax
expense |
|
110,000 |
|
|
|
260,000 |
|
|
|
Net
income |
|
|
|
|
$ |
145,000 |
|
|
|
|
|
|||||||
The
company paid dividends of $15,000 last year. The “Investment in Buisson, S.A.,”
on the balance sheet represents an investment in the stock of another company.
The company's minimum required rate of return of 15%.
Required:
1.
Compute the company's average operating assets for last year.
2.
Compute the company’s margin, turnover, and return on investment (ROI) for last
year. (Round "Turnover" to 1 decimal
place.)
3. What
was the company’s residual income last year?
3.
“I know
headquarters wants us to add that new product line,” said Dell Havasi, manager
of Billings Company’s Office Products Division. “But I want to see the numbers before
I make any move. Our division’s return on investment (ROI) has led the company
for three years, and I don’t want any letdown.”
Billings
Company is a decentralized wholesaler with five autonomous divisions. The
divisions are evaluated on the basis of ROI, with year-end bonuses given to the
divisional managers who have the highest ROIs. Operating results for the
company’s Office Products Division for this year are given below:
|
|
|
|
|
Sales |
$ |
10,000,000 |
|
Variable
expenses |
|
6,000,000 |
|
Contribution
margin |
|
4,000,000 |
|
Fixed
expenses |
|
3,200,000 |
|
Net
operating income |
$ |
800,000 |
|
Divisional
average operating assets |
$ |
4,000,000 |
|
|
||
The
company had an overall return on investment (ROI) of 15% this year (considering
all divisions). Next year the Office Products Division has an opportunity to
add a new product line that would require an additional investment that would
increase average operating assets by $1,000,000. The cost and revenue
characteristics of the new product line per year would be:
|
|
|
|
Sales |
$2,000,000 |
|
Variable
expenses |
60% of
sales |
|
Fixed
expenses |
$640,000 |
|
|
|
Required:
1.
Compute the Office Products Division’s ROI for this year.
2.
Compute the Office Products Division’s ROI for the new product line by itself.
3.
Compute the Office Products Division’s ROI for next year assuming that it
performs the same as this year and adds the new product line.
4. If you
were in Dell Havasi’s position, would you accept or reject the new product
line?
5. Why do
you suppose headquarters is anxious for the Office Products Division to add the
new product line?
6.
Suppose that the company’s minimum required rate of return on operating assets
is 12% and that performance is evaluated using residual income.
a.
Compute the Office Products Division’s residual income for this year.
b.
Compute the Office Products Division’s residual income for the new product line
by itself.
c.
Compute the Office Products Division’s residual income for next year assuming
that it performs the same as this year and adds the new product line.
d. Using
the residual income approach, if you were in Dell Havasi’s position, would you
accept or reject the new product line?
Complete this question by entering your answers in the tabs
below.
USA 
India
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