1. Flexible Budgeting and Variance Analysis

   I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:

   Standard Amount per Case
   	Dark Chocolate		Light Chocolate		Standard Price per Pound
   Cocoa	10 lb.		7 lb.		$4.4
   Sugar	8 lb.		12 lb.		0.6
   Standard labor time	0.3 hr.		0.4 hr.

   	Dark Chocolate		Light Chocolate
   Planned production	5,100 cases		13,800 cases
   Standard labor rate	$15.5 per hr.		$15.5 per hr.

   I Love My Chocolate does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results:

   	Dark Chocolate		Light Chocolate
   Actual production (cases)	4,800		14,400
   	Actual Price per Pound		Actual Pounds Purchased and Used
   Cocoa	$4.5		149,500
   Sugar	0.55		205,900
   	Actual Labor Rate		Actual Labor Hours Used
   Dark chocolate	$15 per hr.		1,310
   Light chocolate	16 per hr.		5,900

   Required:

   Prepare the following variance analyses for both chocolates and total, based on the actual results and production levels at the end of the budget year:

   1. Price variance is the difference between the actual and standard prices, multiplied by the actual quantity.Direct materials price variance, The cost associated with the difference between the standard quantity and the actual quantity of direct materials used in producing a commodity.direct materials quantity variance, and total variance.
   2. The cost associated with the difference between the standard rate and the actual rate paid for direct labor used in producing a commodity.Direct labor rate variance, The cost associated with the difference between standard and actual hours of direct labor spent for producing a commodity.direct labor time variance, and total variance.

   Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If there is no variance, enter a zero.

   a.	Direct materials price variance	$	Favorable Unfavorable
   	Direct materials quantity variance	$	Favorable Unfavorable
   	Total direct materials The difference between actual cost and the flexible budget at actual volumes.cost variance	$	Favorable Unfavorable
   b.	Direct labor rate variance	$	Favorable Unfavorable
   	Direct labor time variance	$	Favorable Unfavorable
   	Total direct labor cost variance	$	Favorable Unfavorable

   2. The variance analyses should be based on the

   • actual
   • standard
   amounts at
   • actual
   • standard
   volumes. The budget must flex with the volume changes. If the
   • actual
   • standard
   volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the
   • actual
   • standard
   production. In this way, spending from volume changes can be separated from efficiency and price variances.

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory. In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months: Month 1 2 3 4 Quality control measures: Number of defects 201 179 140 98 Number of warranty claims 62 55 46 43 Number of customer complaints 118 112 95 74 Material control measures: Purchase order lead time 10 days 9 days 7 days 5 days Scrap as a percent of total cost 1 % 1 % 2 % 3 % Machine performance measures: Machine downtime as a percentage of availability 5 % 6 % 6 % 10 % Use as a percentage of availability 94 % 91 % 88 % 84 % Setup time (hours) 10 12 13 14 Delivery performance measures: Throughput time ? ? ? ? Manufacturing cycle efficiency (MCE) ? ? ? ? Delivery cycle time ? ? ? ? Percentage of on-time deliveries 95 % 94 % 91 % 88 % The president has read in industry journals that throughput time, MCE, and delivery cycle time are important measures of performance, but no one is sure how they are computed. You have been asked to assist the company, and you have gathered the following data relating to these measures: Average per Month (in days) 1 2 3 4 Wait time per order before start of production 9.0 10.9 12.0 14.0 Inspection time per unit 0.9 0.8 0.8 0.8 Process time per unit 3.2 2.7 2.0 1.1 Queue time per unit 3.6 5.0 6.6 8.4 Move time per unit 0.3 0.6 0.6 0.7 Required: 1-a. Compute the throughput time for each month. 1-b. Compute the manufacturing cycle efficiency (MCE) for each month. 1-c. Compute the delivery cycle time for each month. 3-a. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 5 the inspection time, process time, and so forth, are the same as for month 4, except that the company is able to completely eliminate the queue time during production using Lean Production. Compute the new throughput time and MCE. 3-b. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 6 the inspection time, process time, and so forth, are the same as in month 4, except that the company is able to eliminate both the queue time during production and the inspection time using Lean Production. Compute the new throughput time and MCE.

1.2 Answer the following multiple choice questions, by selecting the appropriate answer from the possibilities given.
(For example, 1.2.1 - d)

1.2.1 As specialization becomes the order of the day, vertically integrated companies may be supplanted by networked constellations of business partners. Which of the following activities would resort under this new partnership?



(1)
a) Outsourcing everything
b) Talking inventories
c) An industrial army of robots
d) All of the above

1.2.2 Which of the following is a major challenge for the future in the field of Operations Management?

(1)
a) Managing customer touch points
b) Inventory
c) Environmental quality
d) Transformation

1.2.3 Which heading does not appear in an Income Statement?
(1)
a) Gross profit
b) Operating Profit
c) Total assets
d) Net profit before taxes
1.2.4 The point where neither profit or loss is realized is called:
(1)
a) Breakeven point
b) Median point
c) Central point
d) Balanced point

1.2.5 Total costs can be divided into three (3) main categories namely:

(1)
a) Overheads, sales, expenses
b) Overheads, labour, material
c) Material, expenses, labour
d) None of the above

1.2.6 ABC Company has total current assets of R1 000 000,00 and Total current liabilities of R500 000,00. Calculate the current ratio.


(1)
a) 1:2
b) 2:1
c) 1:1
d) 0.5:1

1.2.7 DEF Company has current assts including cash of R200 000,00, accounts receivable of R200 000,00 and marketable securities(public traded stock) valued at R100 000,00. Current liabilities total R500 000,00. Calculate the Quick ratio.




(1)
a) 1:1
b) 0.5:1
c) 0.4:1
d) 0.3:1



1.2.8 XYZ Company has accounts payable of R100 000,00 and cost of goods sold for the year of R1 400 000,00. Calculate the Days payable outstanding.


(1)
a) 14 days
b) 26.07 days
c) 27.03 days
d) 15.01 days

1.2.9 Company A sells pencils for R8,00 each. The company’s fixed costs amount to R120,00 per month and an additional cost of R3,00 is incurred per pencil (e.g. variable cost). In month A the company sold 50 pencils. Determine the breakeven point for month A.




(1)
a) 11 units
b) 40 units
c) 15 units
d) 24 units

1.2.10 Determine the Re- order level for Item XXX1 using the following information:

Re- order quantity: 1200
Re- order period: 4-6 weeks
Maximum consumption: 225 units per week
Normal consumption per week: 200 units per week






(1)
a) 1350 units
b) 1125 units
c) 1000 units
d) 900 units
[20]

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory.

In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months:

The president has read in industry journals that throughput time, MCE, and delivery cycle time are important measures of performance, but no one is sure how they are computed. You have been asked to assist the company, and you have gathered the following data relating to these measures:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the manufacturing cycle efficiency (MCE) for each month.

1-c. Compute the delivery cycle time for each month.

3-a. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 5 the inspection time, process time, and so forth, are the same as for month 4, except that the company is able to completely eliminate the queue time during production using Lean Production. Compute the new throughput time and MCE.

3-b. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 6 the inspection time, process time, and so forth, are the same as in month 4, except that the company is able to eliminate both the queue time during production and the inspection time using Lean Production. Compute the new throughput time and MCE.

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory.

In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months:

The president has read in industry journals that throughput time, MCE, and delivery cycle time are important measures of performance, but no one is sure how they are computed. You have been asked to assist the company, and you have gathered the following data relating to these measures:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the manufacturing cycle efficiency (MCE) for each month.

1-c. Compute the delivery cycle time for each month.

3-a. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 5 the inspection time, process time, and so forth, are the same as for month 4, except that the company is able to completely eliminate the queue time during production using Lean Production. Compute the new throughput time and MCE.

3-b. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 6 the inspection time, process time, and so forth, are the same as in month 4, except that the company is able to eliminate both the queue time during production and the inspection time using Lean Production. Compute the new throughput time and MCE.

1. An experiment consists of drawing two marbles from a box containing red, yellow, and green marbles. One event in the sample space is RR. What are all of the events in the sample space? (Note: order matters) (3)

2. In a certain large population, 46% of households have a total annual income of over $70,000. A simple random sample is taken of four of these households. What is the probability that more than 2 of the households in the survey have an annual income of over $70,000?                                                                (8)

3. Which would you expect to have a higher standard deviation: data scores that are spread out or data scores that are close together?   
4. In a survey of U.S. households, 588 had home computers while 722 did not. Use this sample to estimate the probability of a household having a home computer.

1. Home Security Systems is studying the time utilization of its sales force. A random sample of 40 sales calls showed that the representatives spend an average of ẍ = 44 minutes on the road with a standard deviation of s = 6 minutes for each sales call.

1. Create a line showing the mean and values for 4 standard deviations above and 4 standard deviations below the mean.                                                                                                                                                (2)

2. Use Chebyshev’s Theorem to find the values between which we can expect at least 89% of the data to fall.                                                                                                                                                                       (2)

3. At least what percent of the data can we expect to fall between 38 and 50 minutes using the Empirical Rule?                                                                                                                                                        (2)

A psychologist studied the number of puzzles subjects were able to solve in a five-minute period while listening to soothing music. Let X be the number of puzzles completed successfully by a subject. The psychologist found that X had a distribution where the possible values of X are 1, 2, 3, 4 with the corresponding probabilities of 0.2, 0.4, 0.3, and 0.1. Use this information to answer questions 20-23 below.

2. Does the above data form a probability distribution? Create the distribution and explain why or why not.(5)

3. Using the above data, what is the probability that a randomly chosen subject completes at least three puzzles in the five-minute period while listening to soothing music?                                                                   (2)

4. Using the above data, the mean µ of X is what? Show work.                                                                             (3)
5. Using the above data (on previous page), the standard deviation σ of X is what? Show work.                      (4)

1. Why would we use the 10-90 percentile range?                                                                                                  +2

2. A data set has a range of 348. Use the range rule of thumb to determine the standard deviation.        +1

A batch of 26 light bulbs includes 5 that are defective. Two light bulbs are randomly selected. If the random variable, X, represents the number of defective light bulbs which can be selected, what values can X have?                

An important quality characteristic used by the manufacturers of ABC asphalt shingles is the amount of moisture the shingles contain when they are packaged. Customers may feel that they have purchased a product lacking in quality if they find moisture and wet shingles inside the packaging. In some cases, excessive moisture can cause the granules attached to the shingles for texture and colouring purposes to fall off the shingles resulting in appearance problems. To monitor the amount of moisture present, the company conducts moisture tests. A shingle is weighed and then dried. The shingle is then reweighed, and based on the amount of moisture taken out of the product, the pounds of moisture per 100 square feet is calculated. The company would like to show that the mean moisture content is less than 0.35 pound per 100 square feet. The file (A & B shingles.csv) includes 36 measurements (in pounds per 100 square feet) for A shingles and 31 for B shingles. 3.1. For the A shingles, form the null and alternative hypothesis to test whether the population mean moisture content is less than 0.35 pound per 100 square feet. 3.2. For the A shingles, conduct the test of hypothesis and find the p-value. Interpret the p-value. Is there evidence at the 0.05 level of significance that the population mean moisture content is less than 0.35 pound per 100 square feet? 3.3. For the B shingles, form the null and alternative hypothesis to test whether the population mean moisture content is less than 0.35 pound per 100 square feet. 3.4. For the B shingles, conduct the test of the hypothesis and find the p-value. Interpret the p-value. Is there evidence at the 0.05 level of significance that the population mean moisture content is less than 0.35 pound per 100 square feet? 3.5. Do you think that the population means for shingles A and B are equal? Form the hypothesis and conduct the test of the hypothesis. What assumption do you need to check before the test for equality of means is performed? 3.6. What assumption about the population distribution is needed in order to conduct the hypothesis tests above? 3.7. Check the assumptions made with histograms, boxplots, normal probability plots or empirical rule. 3.8. Do you think that the assumption needed in order to conduct the hypothesis tests above is valid? Explain.and please send me python commands

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory. In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months:

Month 1 2 3 4

Quality control measures: Number of defects 190 168 129 90

Number of warranty claims 51 44 35 32

Number of customer complaints 107 101 84 63

Material control measures: Purchase order lead time 8 days 7 days 5 days 4 days Scrap as a percent of total cost 1% 1% 2% 3%

Machine performance measures: Machine downtime as a percentage of availability 3% 4% 4% 6%

Use as a percentage of availability 94% 91% 88% 84%

Setup time (hours) 8 10 11 12

Delivery performance measures: Throughput time ? ? ? ? Manufacturing cycle efficiency (MCE) ? ? ? ? Delivery cycle time ? ? ? ?

Percentage of on-time deliveries 95 % 94 % 91 % 88 %

The president has read in industry journals that throughput time, MCE, and delivery cycle time are important measures of performance, but no one is sure how they are computed. You have been asked to assist the company, and you have gathered the following data relating to these measures:

Average per Month (in days) 1 2 3 4

Wait time per order before start of production 9.0 11.4 12.0 14.0

Inspection time per unit 0.9 0.7 0.7 0.7

Process time per unit 2.8 2.0 1.6 1.2

Queue time per unit 3.0 4.3 5.1 7.4

Move time per unit 0.3 0.6 0.6 0.7

Required: 1-a. Compute the throughput time for each month. 1-b. Compute the manufacturing cycle efficiency (MCE) for each month. 1-c. Compute the delivery cycle time for each month.

3-a. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 5 the inspection time, process time, and so forth, are the same as for month 4, except that the company is able to completely eliminate the queue time during production using Lean Production. Compute the new throughput time and MCE.

3-b. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 6 the inspection time, process time, and so forth, are the same as in month 4, except that the company is able to eliminate both the queue time during production and the inspection time using Lean Production. Compute the new throughput time and MCE.

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory.

In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months:

The president has read in industry journals that throughput time, MCE, and delivery cycle time are important measures of performance, but no one is sure how they are computed. You have been asked to assist the company, and you have gathered the following data relating to these measures:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the manufacturing cycle efficiency (MCE) for each month.

1-c. Compute the delivery cycle time for each month.

3-a. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 5 the inspection time, process time, and so forth, are the same as for month 4, except that the company is able to completely eliminate the queue time during production using Lean Production. Compute the new throughput time and MCE.

3-b. Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 6 the inspection time, process time, and so forth, are the same as in month 4, except that the company is able to eliminate both the queue time during production and the inspection time using Lean Production. Compute the new throughput time and MCE.

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory.

In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months:

The president has read in industry journals that throughput time, MCE, and delivery cycle time are important measures of performance, but no one is sure how they are computed. You have been asked to assist the company, and you have gathered the following data relating to these measures: