How much pulp does it produce and how much is wasted

Reference no: EM132970283

Question: For the July and August papermaking department, Victor L. Price, plant, manager of the papermaking mill of the Henderson Company, looks through the cost of production reports. The reports showed that: The reports

The cost rose per ton from the department's performance worried Victor. In consequence, the plant controller was requested to conduct a study to explain the findings. In attempt to establish what the issue may be, the controller, Theresa Rodriguez, initiated an examination by conducting several interviews with key plant staff. Excerpts from a paper machine operator interview with Rita Wiggins are provided:

Rita: Rita: In the department we have two papermakers I have no statistics, but I believe the No. 1 paper mill is using pulp too much and wastes both conversion and resources. In a while we didn't have repairs on No. 1 paper machine. Perhaps this is the issue.

Theresa. Theresa. How much pulp does it produce and how much is wasted?

Rita: Well, you see, we'll squander pulp material if too much pulp is used. The consumer does not pay for the excess product that we utilize to produce the product using additional material. Also, in order to finish the drying process, when there is too much pulp, the machine must slow down. This leads to increased fees for conversion.

Theresa: Theresa: Theresa Are you suspicious of another?

Rita: Rita: Well, we've got two items, green pa per yellow pa per, as you know. Except for the colour, they are the same. The papermaking process on the paper machine is supplemented with colour. I assume these two color sheets behaved differently throughout August. I have no statistics, but it seems like the quantity of green paper trash has grown.

Theresa. Theresa. Why is that? Why?

Rita: Rita: I believe that the standards for the green paper have changed since early August The machines might operate badly during the manufacture of green paper. If so, the cost per ton for green paper would rise.

Theresa also requested a print database for the operational results from August. 9 September Asked by: Theresa Rodriguez Pages Production- details of August

Theresa left Henderson Company for her own firm before filing a report. You were requested to lay down the information obtained by Theresa and send a note to Victor L. Price with a management proposal. The study of the August data should be included in your memo to see whether the rise in unit cost from July explains the rise in the print head or in the colour. Include any relevant support schedules. All figures are rounded to the closest penny.

Pulp and chemicals $295,600 $304,100

Conversion cost 146,000 149,600

Total cost $441,600 $453,700

Number of tons + 1,200 + 1,130

Cost per ton $ 368 $ 401.50

Reference no: EM132970283

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