RE:

Case
12-32

12/2/2012 7:36:32 AM

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

in

local

Net

increase

administrative
in

expenses
costs

(60,000)
$340,000

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

12/4/2012 5:14:48 AM

Modified:12/4/2012 5:30 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

1.a
Months
1234
Process Time 0.6 0.6 0.6 0.6

12/3/2012 8:53:51 AM

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.