【正文】 ewards rather than on individual rewards. 265 EXERCISES 12–1 1. Plantwide rate = ($1,200,000 + $1,800,000 + $600,000)/60,000 = $60 per machine hour Unit overhead cost = ($60 ? 50,000)/100,000 = $30 Activity rates: Machine rate = $1,800,000/60,000 = $30 per machine hour Testing rate = $1,200,000/40,000 = $30 per testing hour Rework rate = $600,000/20,000 = $30 per rework hour Total overhead cost = ($30 ? 50,000) + ($30 ? 20,000) + ($30 ? 5,000) = $2,250,000 Unit overhead cost = $2,250,000/100,000 = $ Improving the accuracy reduced the cost by $, which is still less than the $10 reduction needed. What this means is that although accuracy has a positive effect on the price, it is not the only problem. It appears that petitors may be more efficient than Timesaver. This oute then signals the need to reduce costs. 2. Since testing and rework costs and setup and rework time are both reduced by 50%, the activity rates remain the same, although the amount of cost assigned to the regular microwave will change: Total overhead cost = ($30 ? 50,000) + ($30 ? 10,000) + ($30 ? 2,500) = $1,875,000 Unit cost = $1,875,000/100,000 = $ The cost now is $ less than the original, which allows management to reduce the price by $10, increasing the petitive position of the regular model. ABC is concerned with how costs are assigned, whereas ABM is not only concerned with how they are assigned but also with how costs can be reduced. Cost accuracy and cost reduction are the dual themes of ABM. 266 12–2 The following are possible sets of questions and answers (provided as examples of what students may suggest): Activity 1: Question: Why is the oil puddle cleaned daily? Answer: Because the production equipment leaks oil every day. Question: Why does the production equipment leak oil? Answer: Because a seal is damaged (root cause). Question: How do we repair the damaged seal? Answer: By replacing it. Activity 2: Question: Why are we giving sales allowances? Answer: Because the product is not working as it should. Question: Why is the product not working as it should? Answer: Usually because it has a defective ponent. Question: Why does it have a defective ponent? Answer: Because our subassembly processes occasionally produce bad ponents. Question: Why do our subassembly processes produce bad ponents? Answer: Because our workers are not as well trained as they should be (root cause). Question: How do we improve the skills of our workers? Answer: By ensuring that they all pass a rigorous training course. 267 12–3 Nonvalueadded: Comparing documents (state detection) $85,500 ( ? $570,000) Resolving discrepancies (rework) $399,000 ( ? $570,000) Valueadded: Preparing checks $57,000 ( ? $570,000) Mailing checks $28,500 ( ? $570,000) 12–4 Questions 2–6 represent a possible sequence for the activity of paring documents, and Questions 1 and 3–6 represent a possible sequence for resolving discrepancies. The two activities have a mon root cause. Question 1: Why are we resolving discrepancies? Answer: Because the purchase order, receiving report, and invoice have been pared and found to be in disagreement. Question 2: Why are documents being pared? Answer: Because they may not agree. Question 3: Why would the documents not agree? Answer: Because one or more may be wrong. Question 4: Why would a document be wrong? Answer: Because the amount received from the supplier may not correspond to the amount ordered or because the amount billed may not correspond to the amount received or both. Question 5: Why are the amounts different? Answer: Because of clerical error—either by us or by the supplier. Question 6: How can we avoid clerical error? Answer: Training for our clerks will reduce the number of discrepancies。 for suppliers, extra training and care can be suggested where there is evidence of a problem. 268 12–5 1. A process is a collection of activities with a mon objective. The mon objective of procurement is to supply bought and paid for materials to operations (., the manufacturing process). The mon objective of purchasing is to produce a request for materials from suppliers。 the mon objective of receiving is to process materials from suppliers and move them to the operations area (., stores or manufacturing)。 the mon objective of paying bills is to pay for the materials received from suppliers. 2. The effect is to reduce the demand for the activity of resolving discrepancies by 30%. By so doing, Bienstar will save 21% ( ? ) of its clerical time. Thus, about three clerks can be eliminated by reassigning them to other areas. This will produce savings of about $114,000 per year. This is an example of process improvement—an incremental increase in process efficiency resulting in a cost reduction. 12–6 EDI eliminates the demand for virtually all the activities within the billpaying process. Some demand may be left for payment activities relative to the acquisition of nonproductive supplies. Assuming conservatively that 90% of the demand is gone, there would be a need for perhaps two clerks. This would save the pany $494,000 per year for this subprocess alone. Additional savings would be realized from reduction of demands for purchasing and receiving activities. Switching to an EDI procurement structure is an example of process innovation. 269 12–7 Case NonValueAdded Cost Root Cause Cost Reduction 1 $19 per unita Process design Activity selection 2 $1,900 per setupb Product design Activity reduction 3 $80 per unitc Plant layout Activity elimination 4 $132,000 per yeard Multiple* Activity selection 5 $180 per unite Suppliers