Page 359 - Accounting Information Systems

330 PART II Transaction Cycles and Business Processes

FI G U RE
7-21 COST ASSIGNMENT TO VALUE STREAM

Product
Sales Warehousing Manufacturing Shipping
Planning

Production Production Cell
Materials Labor Machines

Value Stream Product Family A

Marketing and Product Support Facilities Rent & Distribution Expenses
Selling Expenses Design Labor Maintenance

Value Stream Product Family B

Production Production Cell
Materials Labor Machines

all individuals working in the value stream is charged to the stream. Support labor such as maintenance
of machines, production planning, and selling are also included. Wherever possible, therefore, each em-
ployee should be assigned to a single value stream, rather than having their time split among several dif-
ferent streams.
Typically, the only allocated cost in the value stream is a charge per square foot for the value stream
production facility. This allocation would include the cost of rent and building maintenance. The logic
behind this is to promote efficiency by encouraging value stream team members to minimize the space
used to operate the value stream. General overhead costs incurred outside the value stream, which cannot

FI GU RE
7-22 GROUPING PRODUCTS BY FAMILIES

Process

Pipe Welding Packing
Product Bending Unit Assembly and
Product Shipping
Family
Machine Labor Labor Labor Labor
QRM 180 V A X X X
QRM 192 V A X X X
RKX 45 F B X X X X X
LOC 67 Y C X X X X
RKX 65 AF B X X X X X
RKX 95 XF B X X X X X