Acc400 Accounting for Decision Making: P19.1A Castner Corporation is considering implementation

Acc400 Accounting for Decision Making

P19.1A Identifying Value-Added and Non-Value-Added Activities
Castner Corporation is considering implementation of a JIT inventory system. The company’s industrial engineer recently conducted a study to determine the average number of days spent in each activity of the production process. The following table summarizes her findings:
Production Activity Number of Days
Inspecting materials 3
Storing materials 17
Moving materials into production 3
Setting up production equipment 2
Cutting materials 6
Bending materials 5
Assembling finished products 9
Painting finished products 5

Instructions:
a. Identify Castner’s value-added production activities.
b. Identify Castner’s non-value-added production activities.
c. Calculate Castner’s total cycle time.
d. Determine Castner’s manufacturing efficiency ratio.
e. Which of the above activities might be reduced or eliminated if Castner implemented a JIT system?
f. What ethical issues might be related to eliminating some of the non-value-added activities?
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