To measure controllable production inefficiencies,which of the following is the best basis for a company to use in establishing the standard hours allowed for the output of one unit of product?
A) Average historical performance for the last several years.
B) Engineering estimates based on ideal performance.
C) Engineering estimates based on attainable performance.
D) The hours per unit that would be required for the present workforce to satisfy expected demand over the long run.

Question

Quizplus · Accepted Answer

Engineering estimates based on attainable performance would be the best basis for establishing the standard hours allowed for the output of one unit of product because it considers both the ideal performance and the current capabilities of the workforce. This would provide a more realistic and achievable standard, which can be used to measure any controllable production inefficiencies. Average historical performance may not accurately reflect current capabilities, while engineering estimates based on ideal performance may not be achievable in reality. The standard hours allowed should also consider expected demand over the long run, but this can be incorporated into the engineering estimates based on attainable performance.

To Measure Controllable Production Inefficiencies,which of the Following Is the Best