Prior to Installing a JIT System,Charlotte Company Used Machine Hours

question 12

Essay

Prior to installing a JIT system,Charlotte Company used machine hours to assign maintenance costs to its three products of 4-cm,6-cm,and 8-cm plastic pipe.
The maintenance costs totalled $120,000 per year.The machine hours used by each product and the quantity produced of each product are as follows:
$\begin{array}{lcc}& \underline{\text { Machine Hours}}& \underline{\text { Quantity Producer}}\\4 \mathrm{~cm} & 1,000 & 400 \mathrm{rolls} \\6 \mathrm{~cm} & 1,500 & 450 \mathrm{rolls} \\8 \mathrm{~cm} & 2.500 & 1.250 \mathrm{rolls}\end{array}$
After installing JIT,three manufacturing cells were created and the cell workers were trained to perform maintenance.Maintenance costs for the three cells still totalled $120,000; however,these costs are now traceable to each cell.
$$\begin{array} { c r } \text { Cell, } 4 \mathrm {~cm} &\$18,000 \\\text { Cell, } 6 \mathrm {~cm} & 31,500 \\\text { Cell, } 8 \mathrm {~cm} & 70,500\end{array}$$
a.Compute the maintenance cost per roll for each type of pipe before JIT is installed.
b.Compute the maintenance cost per roll for each type of pipe after JIT is installed.
c.Explain why the JIT maintenance cost per roll is more accurate than the cost per roll using the traditional approach.

---

Definitions:

Protein Synthesis

The process by which cells build proteins, involving transcription of DNA into mRNA and translation of mRNA into a polypeptide chain.

Cortisol

A steroid hormone produced by the adrenal glands, involved in the body's stress response and metabolism regulation.

Aldosterone

A hormone produced by the adrenal glands that regulates sodium and potassium levels in the body, affecting blood pressure.

Congenital Hypothyroidism

A condition present at birth where the thyroid gland does not produce enough thyroid hormone, critical for growth and development.