Explain how the work cell manufacturing layout increases productivity.

Short Answer

Expert verified

Work cell manufacturing layout increases productivity by eliminating work in process, reducing wastage, and having less supervision in the manufacturing process.

Step by step solution

01

Work cell

A work cell under JIT is an area that provides everything needed for the manufacturing process. A work cell is accompanied by required machinery and labor resources.

02

Increased productivity under work cell manufacturing layout

Unlike the traditional manufacturing system, the work cell layout does not separate the production process into separate departments. Under work cell employees work in a team and complete the work without any supervision. Production is done in small batches of units and quality inspection is done throughout the process. As soon as the finished product is moved out of the work cell, and the more raw material is procured for the supplier just in time. So, in this way, there is no work in process inventory in this system.

Thus, in this way, a demand-pull system works under a work cell layout that reduces waste and increases production without moving the work in process.

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Most popular questions from this chapter

Question:Treat Dog Collars uses activity-based costing. Treat’s system has the following features:

___________________________________________________________________

Activity Allocation BasePredetermined

Overhead Allocation Rate

Purchasing Number of purchase orders \( 60.00 per purchase order

Assembling Number of parts 0.36 per part

Packaging Number of finished collars 0.19 per collar

___________________________________________________________________

Each collar has three parts, direct materials cost is \)5.00 per collar, and direct laborcost is \(4.00 per collar. Suppose Animal Hut has asked for a bid on 30,000 dog collars.Treat will issue a total of 175 purchase orders if Animal Hut accepts Treat’s bid.

Requirements

1. Compute the total estimated cost Treat will incur to purchase the needed materialsand then assemble and package 30,000 dog collars. Also compute the cost percollar.

2. For bidding, Treat adds a 40% markup to total cost. What total price will the companybid for the entire Animal Hut order?

3. Suppose that instead of an ABC system, Treat has a traditional product costingsystem that allocates indirect costs at the rate of \)9.50 per direct labor hour. Thedog collar order will require 9,000 direct labor hours. What total price will Treat bidusing this system’s total cost?

4. Use your answers to Requirements 2 and 3 to explain how ABC can help Treatmake a better decision about the bid price it will offer Animal Hut.

Goodwin, Inc. manufactures children’s sandals. Similar sandals manufactured by competitors sell for $12.50 per pair. Goodwin desires a 20% net profit margin. What is Goodwin’s target cost?

Question:Blanchette Plant Service completed a special landscaping job for Kerry Company. Blanchette uses ABC and has the following predetermined overhead allocation rates:

Activity Predetermined

Allocation Base Overhead Allocation Rate

Designing Number of designs \( 290 per design

Planting Number of plants \) 20 per plant

The Kerry job included \(750 in plants; \)1,300 in direct labor; one design; and 30 plants.

Requirements

3. If Blanchette desires an operating income of 30% of cost, how much should the company charge for the Kerry job?

Which accounts are adjusted for the underallocated or overallocated overhead in JIT costing?

Explain the difference between the target price and target cost.

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