Resser Corporation Manufactures Serving Trays and Utensils for Use by Airlines

question 24

Essay

Resser Corporation manufactures serving trays and utensils for use by airlines for meal service.Several airlines order these products in large quantities.Resser had adopted an activity-based management philosophy.Listed below are the principal activities of the company.
$\begin{array}{ll}\text { Product inspection } & \text { Product marketing } \\\text { Product packaging } & \text { Accounting } \\\text { Materials storage } & \text { Moving work in process }\\\text { Product engineering } & \text { Inventory control } \\\text { Product scheduling } & \text { Production - assembly } \\\text { Materials purchasing } & \text { Production area clean up }\\ \text { Production -machine setup } & \text { Human resources services } \\\text { Building maintenance } & \text { Product rework } \\\text { New product design } & \text { Depreciation of building }\end{array}$

a. Identify activities that are nonvalue-adding.
b. Analyze each of the nonvalue-adding activities and determine which are necessary. Suggest how each of the activities that you classified as unnecessary could be reduced or eliminated.

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Definitions:

Maker

The party in a promissory note who is making the promise to pay.

Petty Cash

A petty cash reserve intended for settling small expenses that don't justify the use of a check.

Cash Over and Short

An account used to report a discrepancy between the physical cash counted and the expected amount in a company's records, representing either an excess or shortage.

Journal Entry

The record of a financial transaction in an accounting system whereby debits and credits are made to various accounts to maintain balance.