Chocolate Delights Company produces baking chocolate for use by commercial organizations. The company is analyzing its operations in preparation for reconfigure its factory setup.
Currently, each batch of chocolate requires the following processes:
Function Time (Minutes)
Receiving ingredients from vendors 90
Transporting ingredients to stockroom 100
Ingredient storage 6,400
Transporting ingredients to production area 75
Mixing ingredients 400
Cooking ingredients 180
Cooling chocolate 90
Packaging chocolate 160
Moving finished goods to warehouse 105
Storing finished goods in warehouse 20,500
Moving finished goods to trucks 150
a) Calculate the total cycle time necessary to manufacture a batch of chocolate.
b) Identify the value-added functions
c) Calculate the manufacturing cycle efficiency (MCE) of this process.
d) Assume that a management consultant has established a goal that Chocolate Delights
Company increase its MCE to 5 percent or greater. Identify three possible areas in which
the company could reduce its cycle time.
Additional Requirements
Level of Detail: Show all work
Other Requirements: Prepare the necessary journal entries from the following information for Russom Company, which uses a perpetual inventory system.
a. Purchased raw material on account, $61,200.
b. Requisitioned raw material for production as follows: direct material-75 percent of purchases; indirect material-20 percent of purchases.
c. Direct labor wages of $35,500 are accrued as are indirect labor wages of $14,100.
d. Overhead incurred and paid for is $68,100.
e. Overhead is applied to production based on 125 percent of direct labor cost.
f. Goods costing $99,500 were completed during the period.
g. Goods costing $53,400 were sold on account for $81,200.