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Tanzania [10]
3 years ago
15

Tyler Apiaries sells bees and beekeeping supplies. Bees​ (including a​ queen) are shipped in special packages according to weigh

t. Suppose Tyler changes its processes so that the average package weight is 1.9​kg, with a new standard deviation of0.14 kg. Tyler markets the packages of bees as weighing 1.8 ​kg, and the lower and upper tolerance limits are 1.1 kg and 2.5 ​kg, respectively. Calculate the process capability index for the weight of the bee packages. Is Tyler able to meet the tolerance​ limits?
Business
1 answer:
Sergio039 [100]3 years ago
3 0

Answer: 0.143

Explanation:

Given the following :

Average package weight(m) = 1.9kg

Standard deviation(sd) = 1.4kg

Upper Tolerance Limit (UTL) = 2.5kg

Lower Tolerance limit (LTL) = 1.1kg

Cpk = min[( average weight -Lower Tolerance Limit / 3 (standard deviation) , (UTL- average weight / 3(Standard Deviation)]

Cpk = min[( 1.9 - 1.1 / 3 (1.4)) , (2.5 - 1.9 / 3(1.4))]

Cpk = min[(0.8 / 4.2), (0.6 / 4.2)]

Cpk = min[0.190, 0.143])

Hence,

Process capability index = 0.143

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Part a.

Income statement based on the absorption costing concept.

Sales                                                                                      $8,800,000.00

Less Cost of Sales

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Add Manufacturing Cost                          $6,048,000.00

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Gross Profit                                                                            $3,256,000.00

Less Expenses :

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Net Income/(loss)                                                                   $2,376,000.00

Part b.

Income statement based on the variable costing concept.

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Beginning  Inventory                                          $0

Add Manufacturing Cost                          $5,520,000.00

Less Ending Inventory                                ($460,000.00) ($5,060,000.00)

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Less Expenses :

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Selling and administrative expenses:

Variable                                                      $528,000.00

Fixed                                                           $352,000.00      ($1,408,000.00)

Net Income/(loss)                                                                    $2,332,000.00

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<u>Units in Ending Inventory Calculation :</u>

Production                             48,000

Less Sales                            (44,000)

Ending Inventory                    4,000

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<u>Variable Manufacturing Costs</u>

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Direct labor                                 $1,344,000.00

Variable manufacturing cost        $816,000.00

Fixed manufacturing cost            $528,000.00

Total                                           $6,048,000.00

Ending Inventory =  $6,048,000.00 × 4,000 / 48,000

                            =   $504,000

Variable Costing Calcs

<u>Variable Manufacturing Costs</u>

Direct materials                         $3,360,000.00

Direct labor                                 $1,344,000.00

Variable manufacturing cost        $816,000.00

Total                                           $5,520,000.00

Ending Inventory =  $5,520,000.00 × 4,000 / 48,000

                            =   $460,000

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