Moss Manufacturing Has Just Completed a Major Change in Its

question 70

Essay

Moss Manufacturing has just completed a major change in its quality control (QC)process.Previously,products had been reviewed by QC inspectors at the end of each major process,and the company's ten QC inspectors were charged as direct labor to the operation or job.In an effort to improve efficiency and quality,a computerized video QC system was purchased for $250,000.The system consists of a minicomputer,15 video cameras,other peripheral hardware,and software.
The new system used cameras stationed by QC engineers at key points in the production process.Each time an operation changes or there is a new operation,the cameras are moved,and a new master picture is loaded into the computer by a QC engineer.The camera takes pictures of the units in process,and the computer compares them to the picture of a "good" unit.Any differences are sent to a QC engineer who removes the bad units and discusses the flaws with the production supervisors.The new system has replaced the ten QC inspectors with two QC engineers.
The operating costs of the new QC system,including the salaries of the QC engineers,have been included as factory overhead in calculating the company's volume-based factory overhead rate which is based on direct labor dollars.
The company's president is confused.His vice president of production has told him how efficient the new system is,yet there is a large increase in the factory overhead rate.The computation of the rate before and after automation is shown below.

---

Definitions:

Functional Nursing

A method of organizing nursing staff by specific tasks and roles rather than by patient care needs.

Primary Nursing

One nurse is responsible for the total care of clients 24 hours a day, 7 days a week, and associates provide care when the primary nurse is not available.

Patient-Focused Care

A delivery model that brings all services and care providers to the client.

Cross-Trained

Pertaining to individuals who have been trained in multiple disciplines or skill sets, enhancing their ability to perform diverse tasks or roles within an organization.