RE: Case 12-32

Deangela Dixon Modified:12/2/2012 7:38 AM

12/2/2012 7:36:32 AM

1. The decision being considered here is whether to continue operations at Ashton. The only relevant costs are the future facility costs that would be affected by this decision. If the facility were shut down, the Ashton facility has no resale value. In addition, if the Ashton facility were sold, the company would have to rent additional space at the remaining processing centers. There is no real cost at this point of using the Ashton facility despite what the financial performance report indicates. Therefore, it might be a better idea to consider shutting down the other facilities since the rent on those facilities might be avoided.The relevant costs and other variables that should be considered in this decision are: Increase in rent at Pocatello and Idaho Falls $400,000 Decrease Net in local administrative in expenses costs (60,000) $340,000

increase

There would be costs of moving the equipment from Ashton and there might be some loss of revenues due to disruption of services. In sum, closing down the Ashton facility will almost certainly lead to a decline in FSCs profits. Even though closing down the Ashton facility would result in a decline in overall company profits, it would result in an improved performance report for the Great Basin Region (ignoring the costs of moving equipment and potential loss of revenues from disruption of service to customers).
12 32 Deangela Dixon 12/3/2012 7:28:37 AM

2. If the Ashton facility is shut down, FSCs profits will decline, employees will lose their jobs, and customers will at least temporarily suffer some decline in service. Therefore, Braun is willing to sacrifice the interests of the company, its employees, and its customers just to make his performance report look better. The Standards of Ethical Conduct for Management Accountants still provide useful guidelines. By recommending closing the Ashton facility, Braun will have to violate the Credibility Standard, which requires the disclosure of all relevant information that could reasonably be expected to influence an intended users understanding of the reports, analysis, or recommendation. Presumably, if the corporate board were fully informed of the

consequences of this action, they would disapprove.

RE: Ethical Breach? Deangela Dixon Modified:12/4/2012 5:30 AM 12/4/2012 5:14:48 AM

The danger of ethical breaches is that they are a fundamental change in the ethics of your organization. When an ethical breach occurs, you must move quickly to repair the damage to your organization and then analyze the nature of the breach, determining if the breach was unethical, which should incite a chance in your rules or lead to a severe punishment for the person who initiated the breach Read more: How to Analyze Ethical Breaches | eHow.com http://www.ehow.com/how_8547317_analyze-ethicalbreaches.html#ixzz2E5EWu7Fd It is not fair for Braun to be held accountable for previous mistakes.
RE: Case 12-32 Deangela Dixon 12/5/2012 4:39:22 AM

Prices should be set ignoring the depreciation on the Ashton facility. The cost of using the Ashton facility at this point is zero. Any attempt to recover the sunk cost of the original cost of the building by charging higher prices than the market will bear will lead to less business and lower profits.

RE: Problem 11-22

Deangela Dixon

12/3/2012 8:53:51 AM

1.a Months 1234 Process Time 0.6 0.6 0.6 0.6 Inspection Time 0.1 0.3 0.6 0.8 Move Time 1.4 1.3 1.3 1.4 Queue Time 5.6 5.7 5.6 5.7 -----------------------------------------------------------------------------------------------------------------------------------------Throughput Time 7.7 7.9 8.1 8.5

1b. MCE = (PROCESS TIME)/(THROUGHPUT TIME) Process Time 0.6 0.6 0.6 0.6 Throughput 7.7 7.9 8.1 8.5 ---------------------------------------------------------------------------------------------------------------------------------------MCE = 7.79% 7.59% 7.41% 7.06% 1.c DELIVERY CYCLE TIME = WAIT TIME + THROUGHOUTPUT TIME WAIT TIME 16.7 15.2 12.3 9.6 THROUGHOUT TIME 7.7 7.9 8.1 8.5 ------------------------------------------------------------------------------------------------------------------------------------------DELIVERY CYCLE TIME 24.40 23.10 20.40 18.10

Deangela Dixon

12/5/2012 4:52:22 AM 3. MONTHS THROUGHOUT TIME IN DAYS 5 6 --------------------------------------------------------------Process time 0.6 0.6 Inspection time 0.8 0.0 Move time 1.4 1.4 Queue time 0.0 0.0 ---------------------------------------------------------Total throughoutput time 2.8 2.2

MCE Process time 0.6 0.6 Throughput time 2.8 2.0

------------------------------------------------------21.43% 30.00% question 2 Deangela Dixon 12/4/2012 5:29:13 AM

a. The company seems to be improving in quality, control, material control, on-time delivery, and total delivery cycle time. The company is trying to satisfy customers with improved service.

b. Customer complaints, warranty claims, defects are down but it can be better. Throughput time and (MCE) has deteriorated.

c. The company has concentrated on quality and delivery performance to the customers.In addition the company has also been able to improve its processes to reduce the rate of defects. Increased inspections of products improved the quality of products.