Question

Question: Gautam Gupta and Ken Chen of NatureBox must understand manufacturing costs to effectively operate and succeed as a profitable and efficient business.

Required

1. What are the three main categories of manufacturing costs Gautam and Ken must monitor and control? Provide examples of each.

2. What are four goals of a total quality management process? (Hint: The goals are listed in a margin “Point.”) How can NatureBox use TQM to improve its business activities?

Short answer

Answer

1. Three main categories are dried fruits, direct labor to mix snacks, and factory overhead.

2. Reduced waste, better inventory control, fewer defects, and continuous improvement are four goals of TQM

Step-by-step solution

Meaning of Manufacturing Business  

A manufacturing business refers to a business doing some manufacturing activitiesby converting unprocessed materialsusing various machinery and labor into finished products.

Three main categories of manufacturing costs Gautam and Ken must monitor and control

For Nature Box, manufacturing costs include:

1. The direct material costs such as costs of nuts, dried fruits, cheese, and oatmeal.
2. Direct labor costs include the remuneration of workers who are doing the work of mixing snacks and packing them in bags.
3. Factory overhead expenses include insurance, depreciation on machines that sort and pack snack bags, and utilities.

Gautam Gupta and Ken Chen must keep an eye on and manage these manufacturing expenses if they want the company to be as productive and lucrative as possible.

Four goals of a total quality management process

Reduced waste, improved inventory management, fewer defects, and continual improvement are the four objectives of the total quality management (TQM) approach. NatureBox can use TQM to guarantee the best quality of its essential raw materials. The business can also offer personnel thorough training and oversight. These initiatives will result in less waste throughout the production process and more finished goods that match client requirements.