Q#1. Joint production.
LUML has a “family: of lights (the Omega series by name). The Omega series has three variants based on the glass color and bracket (creatively called Omega-bronze; Omega-silver; Omega-gold). As is implied by the term “family” there is not a great deal of difference between the basic parts of the three variants. Enough to market separately. But not enough to require separate production facilities, etc.
The main difference has to do with the color of glass used for the side panels, and the matching color of the mounting bracket. Hence the names (bronze, silver, gold). The actual cost of the glass and the bracket do vary quite a bit. So, the selling price also varies.
Because of the great product similarity LUML will accept a mixed order for the Omega series. (Recall that LUML produces in minimum lots of 100 with pretty flexible manufacturing capability.) So as long as the order totals at least 100 Omega-series fixtures, any combination of colors can be ordered).
For our purposes, the production cycle for the Omega series includes the following steps.
** Step 1 – Get the order. Verify and double check the mix of colors in the order.
** Step 2 – Stock the number of needed parts at the start of the production line. Of special interest, each fixture has 4 panels of the same color glass; and one matching color bracket. The base and frame are always black. There are 8 other parts.
** Step 3 – Assemble the base and frame.
** Step 4 – Insert the colored glass panes according to the needed mix.
** Step 5 – Add the matching mounting bracket.
** Step 6 – Do a quality control check.
** Step 7 – Manually check the preprinted box on the packaging box to indicate the color fixture. Preprinted options are bronze, silver, gold.
** Step 8 – Put the fixture into the box. Double check the fixture color and the box marking.
** Step 9 – Add a bulb (already in a protective packaging).
** Step 10 – Seal the box.
** Step 11 – Place the boxed finished product into the work area for items awaiting palletization.
On your way back to the office after lunch Tom Dollar hails you. Hello. Great afternoon. Just the (man)(woman) that I wanted to see! I have a problem that I need your help with.
You think -- Oh, oh! What now?
In his office, Tom tells you that he has been asked to provide some information on “costing” of production. The party was concerned that for some of the LUML products there is common or joint production. Multiple products are coming off the same production line. The party wanted to know if Tom could allocate the common costs to each product. The party offered the Omega-series of fixtures as an example. The three products that are differentiated, but they also have much in common.
Tom pulls out some notes. Asks if you are ready to copy?
Roger that.
Tom: The last Omega run was 225 fixtures. 70 bronze; 120 gold; the rest were silver. Humm. I know that I have the cost figures here somewhere. Ok. The common costs for those 225 fixtures was $38,650.
Here are some more numbers that production gave me. Gold glass is $2.25 per panel. Bracket is $4.25. Bronze glass is $.75 per panel. Bracket is $3.25. Silver glass is $1.75 per panel and bracket is $2.73.
I need that allocation pretty quickly. Can I have it tomorrow by say lunch time? I have a meeting with the production people at 2 PM and they have asked to see the results.
By-the-way please make that in a format that is easy to follow and use. I’ll make 25 copies for those in attendance and do not need a long essay. Something that they can easily follow as I narrate!
OK?
What else can you say? Ok!! Can do!!! Will do!!! You call, we haul!!
Back at the office you decide that you need to provide the following to Tom for his meeting.
NOTE: a memo is not required and is probably inappropriate given the stated use of this information. Your answers should meet the standard of being able to be presented to senior managers on short notice --- ergo with little or no modification.
Q#1-1 explain what joint costs are
Q#1-2 Given the processing sequence, is there a split off point or points? What does that mean? If there is a split off point or points, where is it or where are they? Explain.
Q#1-3 Given the data from Tom:
Q1-3a. What allocation method did you use? What base did you use to allocate the common costs?
Q1-3b. Allocate the joint costs to the lot of the three fixture types. [The final allocation should be two decimal points, or dollars and cents. Be sure to verify the total?]
Q1-3c. Show and explain your work.
Q#1-4 Given the data from Tom:
Q1-4a. What is the allocated joint cost per fixture? [The final allocation should be two decimal points, or dollars and cents.]
Q1-4b. Show and explain your work.
Q1-4c. Are you surprised at this result? Explain?
Q#1-5 Briefly, how might this allocation relate to productivity.
Q#2 Goldratt and the Critical Chain
CS 340 Milestone One Guidelines and Rubric Overview: For this assignment, you will implement the fundamental operations of create, read, update,
Retail Transaction Programming Project Project Requirements: Develop a program to emulate a purchase transaction at a retail store. This
7COM1028 Secure Systems Programming Referral Coursework: Secure
Create a GUI program that:Accepts the following from a user:Item NameItem QuantityItem PriceAllows the user to create a file to store the sales receip
CS 340 Final Project Guidelines and Rubric Overview The final project will encompass developing a web service using a software stack and impleme
