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A. Soal Kasus.

Ringo Rag Company


The setting for this case is Columbus, Ohio in the early 1950s. The numbers
in the case have not been updated because there is no way to do so without
changing one or more of the interrelationships which make the case so useful from
a pedagogical standpoint. In tackling the case, keep in mind that when it was
Current an hourly wage of $1.10 was reasonable and a new Cadillac sold for
$4.000. In terms of the managerial issues involved, it is still an excellent case for
2000s.

The Ringo Rag Company purchases scrap cotton fabric which is then
converted into handy cleaning rags in usable size, after it is cleaned and graded.
Main customers for these rags are garages, service stations, factories, and machine
shops. The company buys its rags from three sources: textile converters,
commercial laundries, and junk dealers.

The production process for the company is not complicated. First, rags
purchased from junk dealers are washed and dried in special heavy duty machines.
The cleaned rags and those purchased from laundries, which are already washed,
move next to the grading department. Here, each rag is inspected and graded
according to its absorption ability as either A, B, or C quality, with A as the best
grade. Textile converters sell their spoils (rags) clean and already grade. Next, the
rags are cut into squares of about 1 to 1,5 feet. A the same time, any attached item
such as buttons, metal ornaments, or snaps are removed. Rags purchased from
textile converters do not have anything attached to them. Prices of material which
are too small for futher cutting or contain holes or are not usable for any either
reason are burned. The cut rags are then packaged in 5, 10, 20, and 50 pound
cartons.

Selling prices are as follows (quoted FOB warehouse):

Qualit Carton Size


y 5 lb 10 lb 20 lb 50 lb
A $.90 $1.70 $3.20 $7.00
B $.75 $1.40 $2.60 $5.50
C $.70 $1.30 $2.40 $5.00

Raw material costs vary by source. Textile converters charge $6.00, $5.00,
and $4,00 per cwt (hundred weight) for grade A, B, and C, respectively. Twenty
percent of the weight purchased is lost as waste during the cutting process. This is
referred to as loss factor. Last month, the following quantities were purchased
from textile converters:
Grade A 43,750 lb
Grade B 25,000 lb
Grade C 6,250 lb

Although each purchase was a little different, the company usually had to
agree to take some quantity of C grade fabric when it bought A grade fabric.

Laundries charge $3.00 per cwt. Past experience indicates a 33.33% loss
factor. The yield ratio of material from the laundries is typically about grade A,
grade B, and grade C. Last month, Ringo purchased 60,000 pounds of material
from laundries.

The highest loss factor is incurred from material purchased from junk dealers,
where it amounts to 50%. The junk dealers price for material is $1.00 per cwt. Last
month, the company purchased 50,000 pounds from this source. This ungraded
material usually yield about 1/5 grade A, 2/5 grade B, and 2/5 grade C rags, about
half of the overall loss occurs in grading and about half in cutting.

The company employs twenty-five women in 3 departments. Each of these


women is paid $1.10 perhours. Last months time cards indicate that their time was
spent as follows:

Grading 1,000 hrs.


Cutting 3,000 hrs.
Packing 600 hrs.
Total 4,600 hrs.

Last months production and sales (cleaned, cut, and boxed) in pounds, was:

Sold
Produce
Grade Pound $
d
s
Grade 50,000 50,000 $7,750
A
Grade 50,000 50,000 $6,500
B
Grade 25,000 25,000 $3,125
C
Total 125,000 125,00 $17,37
0 5

All sales are local, and orders are received by phone or mail.
Last months production activities, sources of materials, prices, costs, and
yields are representative of normal operations. Sales usually follow production very
closely, with very little seasonal fluctuation.

Two foremen are employed by the company, each paid $7,500 per year. Both
are nephews of Mr. Ringo. One-fourth of their time is spent loading and unloading
the washers and dryers. Another quarter of their time is spent supervising and
checking the women.

The two washer and dryer set owned by the company are depreciated over 5
years on a straight-line basis. Each set has a capacity of 100 pounds per load and
can cycle about 16 loads during a working day.

Expenses other than raw material and labor for a typical year are as follows:

Depreciation $3,060 $760 washer and dryer; $300 cutting


machines and tables; $2,000 for two cars.
(a).
Natural Gas $600 Used for dryers
Electricity $480 is attributable to the washers and dryers,
to cutting.
Rent $3,200 Leased building (b).
Detergent (for the $1,000
washers)
Bookkeeper, Secretary $4,100
Gasoline and oil (for cars) $400 About $.01 per mile
Travel (Lodging and $6,000 Half for purchasing, half for selling
meals)
Packing cartons $7,200 5 and 10 lb. Boxes at $.07 each, and 20 and
50 lb. Boxes at $.01 each.
Miscellaneous Expenses $1,200
Notes:
(a) One car is used in selling, the other in purchasing.
(b) The building is used as follows: for storing unprocessed rags (average
about 1 months purchased), for storing boxed rags (about one months
sales), for cutting, and 1/8 each for grading and cleaning. One room used
as an office is not counted in the building usage.

The company is organized as a partnership between Mr. James Ringo, who


acts as purchasing agent and president, and Mr. John Wall who handles all sales.
Before forming their partnership 6 years ago, Mr. Ringo was purchasing manager for
a paper mill which produced fine rag-content papers. Mr. Wall had been responsible
for waste products sales for a large clothing manufacturer.

This case was written as part of a student project to provide cost analysis and
business advice for the company. Mr. Ringo said he agreed to the project because
he had no formal cost accounting records at all. He said he and Mr. Wall ran the
business pretty much on their intuition and they often wondered whether there
might be more profitable ways to do things.

For example, Mr. Wall had asked him once why he bothered to sort the junk
rags at all since almost half of them are C grade anyway. He didnt really have a
good answer, and the question had led him to wonder whether he shouldnt perhaps
drop the junk altogether when the washer/dryers wore out in a few years. He liked
the idea of having several sources for raw material so he could shop around to keep
his purchase prices low, but he couldnt prove to himself whether he was buying the
right mix.

He and Mr. Wall built up a good set of steady customers over the years with
good service and good quality at competitive prices. But they had no idea which
products were most profitable.

QUESTIONS:

You first task is to calculate contribution margin and full cost profit for each of
the 5 different purchasing sources (Junk, Laundry, Tex A, Tex B, and Tex C). We
suggest you start as follows:

1. Calculate average revenue per pound, by grade.


2. Calculate weighted average revenue per pound for each of the five
purchasing sources.
3. Calculate raw material cost per pound sold, for each source.
4. Calculate direct labor cost per pound sold for:
a. Grading.
b. Cutting. (consider yields carefully).
5. Calculate packing cost (labor and material) per pound sold.
6. Calculate variable overhead per pound sold for the junk source.
7. Items 1 to 6 represent profit contribution by purchasing source.
8. Assign fixed overhead costs to each of the five purchasing sources:
9. Item 7 less item 8 represents full cost profit by source.

Now, what does this have to do with the management issues? Specifically:

1. How close is the company to an optimal sourcing mix?


2. Can you calculate profitability by grade? Is this information useful?
3. What is your recommendation regarding selling all cleaned, cut and packaged
junk rags as C grade, without sorting?
4. What other recommendations do you have for Mr. Ringo?
5. As an overall assessment, is this business in serious need of your help, or
not? [Hint: can you estimate ROA (Return on Assets) for the business?].

B. Profil Perusahaan.

1. Nama Perusahaan : Ringo Rag Company


2. Tempat dan Waktu : Columbus , Ohio pada awal 1950-an
3. Jenis Perusahaan : Manufactured
4. Aktivitas : Perusahaan membeli scrap (sisa) kain
Perusahaan katun yang kemudian diubah menjadi
kain pembersih berguna dalam ukuran
yang dapat digunakan
5. Customers : Garasi, stasiun layanan, pabrik, dan
toko-toko mesin
6. Suppliers : Konverter tekstil, binatu komersial, dan
dealer sampah
7. Mgr. Pembelian : Mr. James Ringo
dan Presiden Pengalaman Kerja: manajer pembelian
Perusahaan untuk pabrik kertas yang diproduksi
baik kertas kain - konten.
8. Mgr. Penjualan : Mr. John Wall
Pengalaman Kerja: pernah bertanggung
jawab atas produk-produk limbah
penjualan untuk produsen pakaian
besar.

C. Proses Produksi.
Proses produksi bagi perusahaan tidak rumit. Pertama, kain yang dibeli dari
dealer sampah dicuci dan dikeringkan dalam mesin cuci heavy duty (tugas
khusus yang berat). Kain bersih yang dibeli dari binatu, sudah dicuci , masuk ke
departemen grading. Di sini , masing-masing kain diperiksa dan dinilai sesuai
dengan kemampuan penyerapan baik sebagai kualitas A , B , atau C, dengan
kualitas A sebagai kelas terbaik . Konverter Tekstil menjual kain mereka yang
sudah bersih dan sudah dinilai kelasnya. Selanjutnya, kain dipotong menjadi
kotak dari sekitar 1 sampai 1,5 meter. Pada saat yang sama , setiap item yang
melekat seperti tombol , ornamen logam , atau terkunci dihapus . Kain yang
dibeli dari konverter tekstil tidak punya apa-apa yang menyertainya.
D. Harga Jual.
Setelah kain dipotong-potong menjadi ukuran kotak sekitar 1 sampai 1,5 meter,
kemudian dikemas dalam 5, 10, 20, dan 50 karton pound. Adapun Harga jual
adalah sebagai berikut (dikutip FOB gudang ) :

Qualit Carton Size


y 5 lb 10 lb 20 lb 50 lb
A $.90 $1.70 $3.20 $7.00
B $.75 $1.40 $2.60 $5.50
C $.70 $1.30 $2.40 $5.00

E. Biaya Bahan Baku.

Biaya bahan baku bervariasi menurut sumbernya, yaitu sebagai berikut:


1. Konverter Tekstil membebankan biaya $6,00, $5,00, dan $4,00 per CWT
(hundredweight atau sama dengan 100 kilogram) untuk kelas A , B , dan C.
2. Binatu membebankan biaya $3.00 per CWT.
3. Dealer Sampah membebankan biaya untuk bahan adalah $ 1,00 per CWT

F. Faktor Kehilangan (Loss Factor).

Dua puluh persen (20%) dari berat yang dibeli hilang sebagai limbah selama
proses pemotongan . Hal ini disebut sebagai "faktor kehilangan (Loss factor)".
Bulan lalu, jumlah yang dibeli dari konverter tekstil adalah sebagai berikut:

Grade A 43,750 lb
Grade B 25,000 lb
Grade C 6,250 lb

Meskipun setiap pembelian sedikit berbeda, perusahaan biasanya harus setuju


untuk mengambil beberapa kuantitas kain kelas C ketika membeli Sebuah kain
kelas A.. Pengalaman masa lalu menunjukkan faktor loss 33,33%. Rasio hasil
bahan dari binatu biasanya sekitar kelas A , kelas B , dan kelas C. Bulan
lalu, Ringo dibeli 60.000 bahan dari binatu. Faktor kerugian tertinggi terjadi
dari bahan yang dibeli dari dealer sampah , di mana sebesar 50% . Sampah
dealer harga untuk bahan adalah $ 1,00 per CWT . Bulan lalu , perusahaan
membeli 50.000 dari sumber ini . Bahan ini biasanya tidak ditingkatkan
mutunya menghasilkan sekitar 1/5 grade A , 2/5 kelas B , dan 2/5 kain kelas C ,
sekitar setengah dari kerugian secara keseluruhan terjadi pada grading dan
sekitar setengah dalam pemotongan .

G. Biaya Tenaga Kerja.

Perusahaan ini mempekerjakan dua puluh lima perempuan di 3 departemen .


Masing-masing wanita dibayar $ 1,10 per hours . Kartu waktu bulan lalu
menunjukkan bahwa waktu mereka dihabiskan sebagai berikut :
Grading 1,000 hrs.
Cutting 3,000 hrs.
Packing 600 hrs.
Total 4,600 hrs.

Dua mandor dipekerjakan oleh perusahaan , masing-masing dibayar $ 7.500 per


tahun . Keduanya adalah keponakan dari Bapak Ringo . Seperempat dari waktu
mereka dihabiskan bongkar muat mesin cuci dan pengering . Seperempat dari
waktu mereka dihabiskan mengawasi dan memeriksa para wanita .

H. Produksi dan Penjualan.

Produksi bulan lalu dan penjualan ( dibersihkan , dipotong , dan kotak ) dalam
pound , adalah :

Sold
Produce
Grade Pound $
d
s
Grade 50,000 50,000 $7,750
A
Grade 50,000 50,000 $6,500
B
Grade 25,000 25,000 $3,125
C
Total 125,000 125,00 $17,37
0 5

Semua penjualan bersifat lokal, dan pesanan yang diterima melalui telepon
atau surat.
Kegiatan produksi bulan lalu, sumber bahan, harga, biaya, dan hasil mewakili
operasi normal. Penjualan biasanya mengikuti produksi yang sangat erat ,
dengan sangat sedikit fluktuasi musiman .

I. Biaya Overhead Pabrik.

Kedua mesin cuci dan pengering set yang dimiliki oleh perusahaan disusutkan
selama 5 tahun secara garis lurus . Setiap set memiliki kapasitas 100 pound per
beban dan dapat siklus sekitar 16 beban selama hari kerja .

Beban lain selain bahan baku dan tenaga kerja untuk satu tahun khas adalah
sebagai berikut :

Depreciation $3,06 $760 washer and dryer; $300 cutting


0 machines and tables; $2,000 for two cars.
(a).
Natural Gas $600 Used for dryers
Electricity $480 is attributable to the washers and dryers,
to cutting.
Rent $3,20 Leased building (b).
0
Detergent (for the $1,00
washers) 0
Bookkeeper, Secretary $4,10
0
Gasoline and oil (for $400 About $.01 per mile
cars)
Travel (Lodging and $6,00 Half for purchasing, half for selling
meals) 0
Packing cartons $7,20 5 and 10 lb. Boxes at $.07 each, and 20 and
0 50 lb. Boxes at $.01 each.
Miscellaneous $1,20
Expenses 0
Notes:
(a) One car is used in selling, the other in purchasing.
(b) The building is used as follows: for storing unprocessed rags
(average about 1 months purchased), for storing boxed rags (about
one months sales), for cutting, and 1/8 each for grading and
cleaning. One room used as an office is not counted in the building
usage.
.

J. Question 1.

Diminta: Hitung rata-rata pendapatan per pon , dengan kelas.

Jawab:
Pon (bhs belanda) = Pound (Bhs Inggris); disingkat: lb, lbm) adalah satuan massa
(Berat).

Revenue Sold (lb) Rata2= $/lb


Grade ($)
(1) (2) (3=1/2)
Grade A $7,750 50,000 $.155/lb
Grade B $6,500 50,000 $.130/lb
Grade C $3,125 25,000 $.125/lb

K. Question 2.

Diminta: Hitung pendapatan rata-rata tertimbang per pon untuk masing-masing


lima sumber pembelian .
Jawab:
Unit Pendapa
Pembelian Loss tersedia Rata2 tan
Kain Scrap Facto Tertimb
Grade (lb) r Dijual (lb) ang ($)
(5=4*5
(1) (2) (3=1*2) (4) )
Grade A
Konverter Tekstil-
Tex A 43,750 1-20% 35,000 0.70 5,425
1/4*2/
Binatu 60,000 3 10,000 0.20 1,550
1/5*1/
Dealer Sampah 50,000 2 5,000 0.10 775
50,000 1.00 7,750

Grade B
Konverter Tekstil-
Tex B 25,000 1-20% 20,000 0.40 2,600
1/2*2/
Binatu 60,000 3 20,000 0.40 2,600
2/5*1/
Dealer Sampah 50,000 2 10,000 0.20 1,300
50,000 1.00 6,500

Grade C
Konverter Tekstil-
Tex C 6,250 1-20% 5,000 0.20 625
1/4*2/
Binatu 60,000 3 10,000 0.40 1,250
2/5*1/
Dealer Sampah 50,000 2 10,000 0.40 1,250
25,000 1.00 3,125

Dealer Konverter Tekstil (Textile


Sampah Binatu Converter)
(Junk (Laundries
Dealer) ) Tex A Tex B Tex C
Grade A $775 $1,550 $5,425 $0 $0
Grade B $1,300 $2,600 $0 $2,600 $0
Grade C $1,250 $1,250 $0 $0 $625
Total Revenue
($) $3,325 $5,400 $5,425 $2,600 $625

Unit Sold (lb) 50,000 60,000 35,000 20,000 5,000

Average
Revenue per
Pound ($/lb) $0.067 $0.090 $0.155 $0.130 $0.125

L. Question 3.
Diminta: Hitung biaya bahan baku per pon dijual , untuk setiap sumber .

Jawab:

Material Loss Unit


Purchased
(lb) Factor Loss (lb)
(1) (2) (3=1/2)
Binatu 60,000 33.33% 20,000
Dealer Sampah 50,000 50.00% 25,000
Konverter Tekstil-
Tex A 43,750 20.00% 8,750
Konverter Tekstil-
Tex B 25,000 20.00% 5,000
Konverter Tekstil-
Tex C 6,250 20.00% 1,250

Conversi
Material on Material
Cost cwt to lb Cost
(dibagi
(per cwt) 100) (per lb)
(1) (2) (3=1/2)
Binatu $3 100 $0.03
Dealer Sampah $1 100 $0.01
Konverter Tekstil-
Tex A $6 100 $0.06
Konverter Tekstil-
Tex B $5 100 $0.05
Konverter Tekstil-
Tex C $4 100 $0.04

Materi Material
Material Unit Unit al Total cost
Materi per
Purchased Loss Sold Cost al pound
(lb) (lb) (lb) per lb Cost sold
(3=1+2 (5=1*4
(1) (2) ) (4) ) (6=5/3)
Binatu 60,000 20,000 40,000 $0.03 $1,800 $0.045
Dealer Sampah 50,000 25,000 25,000 $0.01 $500 $0.020
Konverter Tekstil-
Tex A 43,750 8,750 35,000 $0.06 $2,625 $0.075
Konverter Tekstil-
Tex B 25,000 5,000 20,000 $0.05 $1,250 $0.063
Konverter Tekstil- 6,250 1,250 5,000 $0.04 $250 $0.050
Tex C
125,000 $6,425

M. Question 4.

Diminta: Menghitung biaya tenaga kerja langsung per pound dijual :


a . Grading .
b . Cutting . ( mempertimbangkan hasil hati-hati ) .

Jawab:

Gradin
g Direct Cost
Labou
Sold r per Total Cost
Kompos
(lb) isi (jam) jam Cost per lb
(2=1/2 (5=3* (6=5/
(1) ) (3) (4) 4) 1)
40,00 0.017
Binatu 0 0.62 620 1.1 682 05
25,00 0.016
Dealer Sampah 0 0.38 380 1.1 418 72
65,00
0 1.00 1000 1000

Cuttin
g Direct Cost
Labou
Sold r per Total Cost
Kompos
(lb) isi (jam) jam Cost per lb
(2=1/2 (5=3* (6=5/
(1) ) (3) (4) 4) 1)
40,00 0.026
Binatu 0 0.32 960 1.1 1056 4
25,00 0.026
Dealer Sampah 0 0.20 600 1.1 660 4
Konverter Tekstil- 35,00 0.026
Tex A 0 0.28 840 1.1 924 4
Konverter Tekstil- 20,00 0.026
Tex B 0 0.16 480 1.1 528 4
Konverter Tekstil- 0.026
Tex C 5,000 0.04 120 1.1 132 4
125,0
00 1.00 3000 3300

N. Question 5.
Diminta: Hitung biaya pengepakan ( tenaga kerja dan bahan ) per pon dijual .

Jawab:

Packin
g Cost Direct Cost
Labou
Sold r per Total Cost
Kompos
(lb) isi (jam) jam Cost per lb
(2=1/2 (5=3* (6=5/
(1) ) (3) (4) 4) 1)
40,00 0.005
Binatu 0 0.32 192 1.1 211.2 28
25,00 0.005
Dealer Sampah 0 0.20 120 1.1 132 28
Konverter Tekstil- 35,00 0.005
Tex A 0 0.28 168 1.1 184.8 28
Konverter Tekstil- 20,00 0.005
Tex B 0 0.16 96 1.1 105.6 28
Konverter Tekstil- 0.005
Tex C 5,000 0.04 24 1.1 26.4 28
125,0
00 1.00 600 660

Boxes
Cost Box Harga
Sold yang Box Total Cost
dibutuhk per
(lb) an unit Cost per lb
(4=2* (5=4/
(1) (2) (3) 3) 1)
40,00
Binatu 0 800 0.1 80 0.002
25,00
Dealer Sampah 0 500 0.1 50 0.002
Konverter Tekstil- 35,00
Tex A 0 700 0.1 70 0.002
Konverter Tekstil- 20,00
Tex B 0 400 0.1 40 0.002
Konverter Tekstil-
Tex C 5,000 100 0.1 10 0.002
125,0
00 2,500 250

O. Question 6.
Diminta: Hitung overhead variabel per pon dijual untuk sumber sampah .

Jawab:

P. Question 7.

Diminta: Item 1 sampai 6 merupakan kontribusi laba dengan membeli sumber.

Jawab:
Dealer Konverter Tekstil (Textile
Sampah Binatu Converter)
(Junk (Laundri
Dealer) es) Tex A Tex B Tex C
Revenue 0.07 0.09 0.16 0.13 0.13
Variable Cost:
0.0500
Raw Material 0.02000 0.04500 0.07500 0.06300 0
Labour 0.0000
(Grading) 0.01672 0.01705 0.00000 0.00000 0
Labour 0.0264
(Cutting) 0.02640 0.02640 0.02640 0.02640 0
Labour 0.0052
(Packing) 0.00528 0.00528 0.00528 0.00528 8
0.0020
Labour (Boxes) 0.00200 0.00200 0.00200 0.00200 0
Total Variable 0.0836
Cost 0.07040 0.09573 0.10868 0.09668 8

Contribution (0.00040 (0.00573 0.0463


Margin ) ) 0.05132 0.03332 2

Q. Question 8.

Diminta: Menetapkan biaya overhead tetap untuk masing-masing dari lima


sumber pembelian.
Jawab:
R. Question 9.

Diminta: Butir 7 less item 8 merupakan laba biaya penuh oleh sumber.
Jawab:

S. Management Issues 1.

Diminta:
Jawab:

T. Management Issues 2.

Diminta:
Jawab:

U. Management Issues 3.

Diminta:
Jawab:

V. Management Issues 4.

Diminta:
Jawab:

W. Management Issues 5.

Diminta:
Jawab: