Answer:
We might define total customer response time as the amount of time between the time a customer places an order and the time when that order is received by the customer. Manufacturing (production) cycle time can be defined as the time-lapse between when the manufacturing department receives the order and when the order is completed (i.e., when finished goods are created). (Note: manufacturing cycle time is sometimes referred to as manufacturing lead time.) As noted in the text, processing cycle efficiency (PCE) is a method of assessing process efficiency, based on the relationship between actual processing time and total production time. In formula form, we can define PCE as:
PCE = processing time/total manufacturing time
PCE = processing time/(processing time + moving time + storage time + inspection time)
Alternatively, we can view PCE as the ratio of "value-added time" to the sum of "value-added time" + "non-value-added time." These terms are defined, and viewed, from the perspective of the customer. That is, would the customer be willing to pay for the indicated activities/time Does the activity add value in the eyes of the customer
Answer:
Direct cost Sales variance Control Systems
Sales variance is the breakdown of sales volume and which includes components like manufacturing cost (which is a direct cost), labour cost, material costs. Certain procedures are set in place, which help the organisation to control performance, which will include components from planning to evaluation. Similarly, operational financial controls are also applied for cost control in their respective areas.
Discussion and analysis:
Scarce is time management. Management by exception has a philosophy that managers are departing materially from plan i.e. not going according to plan and give primary attention to things. As the corollary, according to the basically proceeding plan the areas are given relatively less attention by the managers. When the things are not going according to the plan to identify situation from a financial standpoint, the variance can be referred as information signals. Thus, there on part of managers, no intervention is needed in which variances are deemed small or immaterial. On the other hand, to uncover the underlying cause which may lead to some changes or intervention, it may trigger the need of investigation. In that case the variance is considered abnormal.
Answer:
Material usage variance is defined as the difference between the actual raw material units used and the standard units of materials multiplied by standard cost per unit of direct material.
Material Usage Variance =
Where AQ = Actual Quantity
SQ = Standard Quantity
SP = Standard Price per unit.
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From the given data identify the following details:
AQ = Actual Quantity = 720 units
SQ = Standard Quantity = 780 units
SP = Standard Price per unit = $ 40
Therefore,
Material Usage Variance =
=
= $2,400 (F)
Favourable variance here indicates that actual quantity used was less than the standard quantity prescribed.