Discussions responses
SandyRicou188
discussions_responses_accounting_and_healthcare_strategy.docxAccounting
Stellar Packaging Products decided to use a predetermined overhead rate to apply manufacturing overhead to jobs. However, the company’s controller, Robin Simmons, is contemplating which denominator-level driver would be more appropriate: printing press machine hours or direct labor hours. Within the manufacturing process, the employees work in crews of four to six employees each. Simmons notes that there are more direct labor hours than printing press machine hours.
What would be the more appropriate basis of overhead application: printing press machine hours or direct labor hours? Given the choice of driver, are there any implications to consider for under or over applied overhead?
Students Responses
1) Kyle Jansma
Wed Apr 13, 2016 at 7:30 pm
Based on the information given, I would have to say that using the direct labor hours would be the best way to set the predetermined overhead rate for the manufacturing job. This is largely based on not knowing what the two figures would be after your ran them. As the book states with the advent of better technology, improved automation and the use of more highly skilled indirect workers the machine hours for overhead might be a better suited for the situation. (Garrison, Noreen, Brewer, 2015, p. 92) I’m basing my decision on the fact that the labors outnumber the machine hours. One thing you must also be careful with is not over costing the jobs.
Wed Apr 13, 2016 at 9:25 pm
I argue that currently direct labor hours would be the best choice for Stellar's allocation base to determine the overhead rate. Labor hours are the most traditional method and is used for the majority of organizations out there. Stellar has more direct labor rate and printing machine hours, which speaks to nature of Stellar being more human rescource based. However, as the industry changes and the cost driver really does lean more and more toward the presses, if they are indeed generating all the revenue, then considering the future of Stellar I would likely choose machine tool allocation base. Only if Stellar dabbles more in marketing etc rather than straight manufacturing, I may consider staying with labor for long term. Garrison (2015, pg 91) writes regarding cost drivers: ""sophisticated automated equipment has taken over functions that used to be performed by direct labor workers....this increases the need for highly skilled indirect workers" and therefor direct labor has decreased relative to overhead.
I believe Simmons really needs to consider the direction of the company. If in five years the plan is to expand the presses and reduce labor then go for machine tool base. It might also be worth seperating manufacturing out as machine based, which the book has mentioned as a practice of some large organizations.
3) Sara Young
Edited · Thu Apr 14, 2016 at 6:50 pm
In this particular case, Stellar Packaging Products should consider using direct labor hours as a denominator-level driver. Since the crew fluctuates from 4-6 employees and there are more direct labor hours than printing press machine hours this method would be more accurate. From the information given, it looks like using direct labor would add to the manufacturing overhead, which can be considered with the retail pricing. If and when there is over applied overhead, that makes for a better margin. Using printing machine hours could cause under applied overhead and a lesser margin.
Healthcare Strategy
What can an organization do with the information it acquires about customer value preferences? Describe some strategic initiatives for taking advantage of this knowledge.
Respond with thoughtful substantive responses to at least two classmates’ postings.
Wed Apr 13, 2016 at 7:14 pm
"Organizations seek to produce what customers value" (Walston, 2012, p. 45). In healthcare this means providing accessible service, with the highest quality and a competitive cost. An organization needs to take into consideration the particular needs are of a patient population in order to adequately provide care to their demographic of patients. One way this can be achieved is through data extraction and general information about the people being cared for. An example of this could be in a primarily geriatric community. If a healthcare organization recognizes this, it is easier to anticipate their needs. This might include adding primary care providers, nutritional health, or even geriatric health classes. This focuses on what is value added to the patient versus non-value added. In this same “hypothetical” population, adding additional family planning services and parenting courses might not be value-added o this population. By appealing to the specific needs of a patient population, there is not only an increase in patient health and compliance, but there are decreased costs associated with wasted services.
2) Kelly Morris
Wed Apr 13, 2016 at 8:02 am
“The health care industry is at a crossroads as it realigns and prepares for transformation from fee-for-service (FFS) medicine to consumer-centered, value-based accountable care” (Bearder, Carter, & Harve, 2013, p.8). With healthcare being at a cross roads many organizations can gather consumer information based off of the three E's which are Expectations, Empathy, and Engagement. With healthcare being influenced by societal environments it opens up new pathways for facilities and organizations to be focused on quality of care given rather than filling beds. Patients come in every age, ethnicity and with different illnesses it is our job as the provider to provide patients with what to expect, to engage with the patient so to better understand the symptoms they are experiencing and to be empathetic as no one wants to go into a facility for any reason.
Every hospital or facility has a way of tracking viable information regarding patient satisfaction during a patients visit to their facility. Working with PSL we keep a month to month report of customer satisfaction going through each phase and department while they are here at our facility. Each month that report is emailed to all the employees throughout the hospital. The information that the report gives us are patient satisfaction going through registration, wait times, nurse bedside manner, discharge (if the pt was an inpatient). Having those reports every month allows the employees see where the improvements are needing to be made and every department each month will have monthly meetings to go over numbers and discuss ways of improvements for that said department.
Accounting
Stellar Packaging Products decided to use a predetermined overhead rate to apply manufacturing overhead to jobs.
However, the company’s controller, Robin Simmons, is contemplating which denominator
-
level driver would be more
appropriate: printing press mac
hine hours or direct labor hours. Within the manufacturing process, the employees
work in crews of four to six employees each. Simmons notes that there are more direct labor hours than printing
press machine hours
.
What would be the more appropriate basis
of overhead application: printing press machine hours or direct labor
hours? Given the choice of driver, are there any implications to consider for under or over applied overhead
?
Students Responses
1)
Kyle Jansma
Wed Apr 13, 2016 at 7:30 pm
Based on the information given, I would have to say that using the direct labor hours
would be the best way to set the predetermined overhead rate for the manufacturing job. This is
largely based on not knowing
what the two figures would be after your ran them. As the book
states with the advent of better technology, improved automation and the use of more highly
skilled indirect workers the machine hours for overhead might be a better suited for the situation.
(
Garrison, Noreen, Brewer, 2015, p. 92) I’m basing my decision on the fact that the labors
outnumber the machine hours. One thing you must also be careful with is not over costing the
jobs.
2)
Benjamin Cross
Wed Apr 13, 2016 at 9:25 pm
I argue that currently direct labor hours would be the best choice for Stellar's allocation base to determine the
overhead rate. Labo
r hours are the most traditional method and is used for the majority of organizations out
there.
Stellar has more direct labor rate and printing machine hours, which speaks to nature of Stellar being more
human rescource based. However, as the industry cha
nges and the cost driver really does lean more and more
toward the presses, if they are indeed generating all the revenue, then considering the future of Stellar I would likely
choose machine tool allocation base. Only if Stellar dabbles more in marketing
etc rather than straight
manufacturing, I may consider staying with labor for long term. Garrison (2015, pg 91) writes regarding cost drivers:
""sophisticated automated equipment has taken over functions that used to be performed by direct labor
workers...
.this increases the need for highly skilled indirect workers" and therefor direct labor has decreased relative
to overhead.
I believe Simmons really needs to consider the direction of the company. If in five years the plan is to expand the
presses and red
uce labor then go for machine tool base. It might also be worth seperating manufacturing out as
machine based, which the book has mentioned as a practice of some large organizations.
3)
Sara Young
Edited
·
Thu Apr 14, 2016 at 6:50 pm
In this particular case, Stellar Packaging Products should consider using direct labor hours as a denominator
-
level
driver. Since the crew fluctuates from 4
-
6 employees and there are more direct labor hours than printing press
machine hours this method wou
ld be more accurate. From the information given, it looks like using direct labor
would add to the manufacturing overhead, which can be considered with the retail pricing. If and when there is over
applied overhead, that makes for a better margin. Using pr
inting machine hours could cause under applied overhead
and a lesser margin.
Accounting
Stellar Packaging Products decided to use a predetermined overhead rate to apply manufacturing overhead to jobs.
However, the company’s controller, Robin Simmons, is contemplating which denominator-level driver would be more
appropriate: printing press machine hours or direct labor hours. Within the manufacturing process, the employees
work in crews of four to six employees each. Simmons notes that there are more direct labor hours than printing
press machine hours.
What would be the more appropriate basis of overhead application: printing press machine hours or direct labor
hours? Given the choice of driver, are there any implications to consider for under or over applied overhead?
Students Responses
1) Kyle Jansma
Wed Apr 13, 2016 at 7:30 pm
Based on the information given, I would have to say that using the direct labor hours
would be the best way to set the predetermined overhead rate for the manufacturing job. This is
largely based on not knowing what the two figures would be after your ran them. As the book
states with the advent of better technology, improved automation and the use of more highly
skilled indirect workers the machine hours for overhead might be a better suited for the situation.
(Garrison, Noreen, Brewer, 2015, p. 92) I’m basing my decision on the fact that the labors
outnumber the machine hours. One thing you must also be careful with is not over costing the
jobs.
2) Benjamin Cross
Wed Apr 13, 2016 at 9:25 pm
I argue that currently direct labor hours would be the best choice for Stellar's allocation base to determine the
overhead rate. Labor hours are the most traditional method and is used for the majority of organizations out
there. Stellar has more direct labor rate and printing machine hours, which speaks to nature of Stellar being more
human rescource based. However, as the industry changes and the cost driver really does lean more and more
toward the presses, if they are indeed generating all the revenue, then considering the future of Stellar I would likely
choose machine tool allocation base. Only if Stellar dabbles more in marketing etc rather than straight
manufacturing, I may consider staying with labor for long term. Garrison (2015, pg 91) writes regarding cost drivers:
""sophisticated automated equipment has taken over functions that used to be performed by direct labor
workers....this increases the need for highly skilled indirect workers" and therefor direct labor has decreased relative
to overhead.
I believe Simmons really needs to consider the direction of the company. If in five years the plan is to expand the
presses and reduce labor then go for machine tool base. It might also be worth seperating manufacturing out as
machine based, which the book has mentioned as a practice of some large organizations.
3) Sara Young
Edited · Thu Apr 14, 2016 at 6:50 pm
In this particular case, Stellar Packaging Products should consider using direct labor hours as a denominator-level
driver. Since the crew fluctuates from 4-6 employees and there are more direct labor hours than printing press
machine hours this method would be more accurate. From the information given, it looks like using direct labor
would add to the manufacturing overhead, which can be considered with the retail pricing. If and when there is over
applied overhead, that makes for a better margin. Using printing machine hours could cause under applied overhead
and a lesser margin.
