Deck 22: Balanced Scorecard: Quality, Time, and the Theory of Constraints

Question 1

Answer the following questions using the information below:
Cypress Furniture manufactures expensive tables. Its varnishing department is fully automated and requires substantial inspection to keep the machines operating properly. An improperly varnished table is very expensive to correct. Inspection hours for the 5,000 tables varnished in September totaled 1,250 hours by 8 employees. Eight quarts of varnish were used, on average, for each table. The standard amount of varnish per table is nine quarts. The cost of inspection for September was equal to the budgeted amount of $38,000.

-What is the inspection cost per unit?

A) $7.60
B) $4,000
C) $30.40
D) $3,800

Answer 1

$7.60

Question 2

For a fast-food restaurant, the average waiting time might be formulated as:

A)

B)

C)

D)

Answer 2

Question 3

Answer the following questions using the information below:

Karima's Window Company has a variable demand. Historically, its demand has ranged from 20 to 40 windows per day with an average of 30. Karima Ahmed works eight hours a day, five days a week. Each order is one window and each window takes 13 minutes.


-What is the average waiting time, in minutes?

A) 4.4
B) 28.2
C) 1.6
D) 56.3

Answer 3

28.2

Question 4

Answer the following questions using the information below:
The tool crib at a large manufacturing company is responsible for providing tools to the factory workers on demand. The tool crib has a variable demand. Historically, its demand has ranged from 300 to 500 small tools per day with an average of 400. Dana, the tool crib attendant, works eight hours a day, five days a week. Each order is for one small tool and each small tool takes Dana 1 minute to retrieve from the bins.

-What is the average waiting time, in minutes?

A) 1
B) 3.5
C) 1.5
D) 2.5

Question 5

Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. The company has two workstations, photo production and framing. The photo production station is limited by the speed of operating the photo development machine. Framing is limited by the speed of the employees. Framing normally waits for work from photo production. Each department works an eight-hour day. If Captain Carl's Seascapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.

-What is the total production per day if the change is made?

A) 400 units
B) 50 units
C) 200 units
D) 600 units

Question 6

Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. The company has two workstations, photo production and framing. The photo production station is limited by the speed of operating the photo development machine. Framing is limited by the speed of the employees. Framing normally waits for work from photo production. Each department works an eight-hour day. If Captain Carl's Seascapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.

-What is the change in the daily contribution margin if the change is made?

A) $2,000
B) $750
C) $800
D) $250