Nonvalue-Added Activities. Donut Depot manufactures donuts that are available fresh every day at several stores throughout Dallas.
Question:
Nonvalue-Added Activities. Donut Depot manufactures donuts that are available fresh every day at several stores throughout Dallas. Donuts left over at the end of the day are packaged and sold at a reduced price as day-old donuts. Donuts not sold by the end of the second day are contributed to the local food bank (a food supply to help welfare families in the metroplex). The production process consists of the following steps:
(a) Ingredients such as flour, sugar, and cooking oil are received, inspected, and placed in the storeroom until requisitioned by production.
(b) Upon requisition, the ingredients are transported from the storeroom to the production area and staged at the Mixing Department.
(c) Ingredients are blended into a dough mixture in 40-pound batches in six heavy-duty mixers.
(d) The dough is rolled out on large boards and left to rise in a holding area.
(e) When the dough is ready, the boards are mored to the cutting machines; and the donuts are cut. Leftovers from each cutting are accumulated, rerolled on another board, and processed through the cutting machine. At the end of the production day, leftovers and unprocessed dough on boards are thrown in the trash.
(f) The cut donuts and donut holes are placed on wire trays and taken to the cooking area, where the trays are stacked until ready for cooking.
(g) The cooks empty the trays into large vats of hot cooking oil where the donuts and donut holes are, in effect. fried in a sea of oil.
(h) The cooked products are removed from the vats and placed on drying pads which absorb the excess oil from the donuts. While the product is drying, it is inspected. Misshaped donuts are removed from the good batch and set aside for disposal. What the crew doesn't eat is thrown out at the end of the production shift.
(i) After drying, the products are placed on large square boards and moved to the finishing area where they will be coated with glaze, icing, powdered sugar. coconut. candy chips, etc.
(j) After allowing the coating to settle or dry, whichever is the case, the donuts are placed in boxes of four dozen each. Donut holes are packed in boxes with 100 donut holes per box. The boxes are moved to the shipping area to arrait the trucks that will delirer them to the various retail outlets.
(k) Each morning the delivery trucks return the unsold donuts delivered the previous day. (For some reason donut holes are always sold out.) The dayold donuts are repackaged in plastic bags. Each bag contains one dozen donuts and is marked "day old." The packages are then returned to the retail outlets. On the second day; any unsold packages are returned to the shipping area. At the end of the day; these packages are delivered to the food bank.
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1. Identify the activities in the donut production process that fall into process time, inspection time, move time, wait time, and storage time.
2. List the activities in the donut production process that are candidates for nonvalue-added activities. Explain your rationale.
Step by Step Answer:
Managerial Accounting
ISBN: 9780538842822
9th Edition
Authors: Harold M. Sollenberger, Arnold Schneider, Lane K. Anderson