Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed

Download 1.72 Mb.

View original pdf

Page	452/469
Date	01.12.2021
Size	1.72 Mb.
	#57828

1 ... 448 449 450 451 452 453 454 455 ... 469

solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1

21.19 JIT purchasing, choosing suppliers. (20–25 min) 1

2

3
Under an ideal JIT production system, if the manufacturing lead time per unit is very short, there conceivably would be zero stock at the end of each day. Entry (c) would be for €11,900,000 finished goods production, not €12,500,000. If the marketing department could only sell goods costing €11,900,000, the JIT production system would call for direct material purchases and conversion costs of even lower than €8,500,000 and €4,000,000, respectively, in entries (a) and (b.
21.19 JIT purchasing, choosing suppliers.
(20–25 min)
1
Solution Exhibit 21.19 presents the net cash savings of €1,854 from purchasing the toys from Grano BV rather than from Henco. On the basis of these calculations,
Sido should choose Grano.
2
Other factors that Sido should consider before choosing a supplier are
a
The reputation benefits of (i) having products available rather than out of stock when customers want to make purchases and (ii) supplying quality products that customers are satisfied with.
b
The supplier’s flexibility to supply cars at short notice if Sido needs supplies urgently.
c
The supplier’s commitment to continuously improve cost, quality and delivery performance.
d
Sido’s confidence in building a long-run relationship with the supplier based on trust and the willingness to share confidential information with each other.
e
The range of other products that the supplier can supply to Sido.

Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012

Download 1.72 Mb.

Share with your friends:

1 ... 448 449 450 451 452 453 454 455 ... 469