EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

3. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD 3. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
3. a. and b. Month 5 6 Throughput time—days: Process time (x) ... 1.8 1.8 Inspection time... 0.6 0.0 Move time ... 0.4 0.4 Queue time ... 0.0 0.0 Total throughput time (y) ... 2.8 2.2 Manufacturing cycle efficiency (MCE): Process time (x) ÷ Throughput time (y)... 64.3% 81.8% As a company reduces non-value-added activities, the manufacturing cycle efficiency increases rapidly. The goal, of course, is to have an effi-ciency of 100%. This will be achieved when all non-value-added activi-ties have been eliminated and process time is equal to throughput time. Problem 10-22 (30 minutes)