An accounting firm is capable of processing 20 income tax forms per day. The average number of forms in various stages of processing at any one time in the firm is 64. What is the average processing time per income tax form
A) More than 2 but less than or equal to 3 days
B) More than 3 but less than or equal to 4 days
C) More than 4 but less than or equal to 5 days
D) More than 5 days

Question

Quizplus · Accepted Answer

To determine the average processing time per income tax form, we need to use Little's Law, which states that the average number of items in a system equals the average rate at which they arrive multiplied by the average time they spend in the system.

In this case, the average number of forms in the system is 64, and we know that the firm can process 20 forms per day. So the average processing time per form is:

64 = 20 x processing time

processing time = 64/20 = 3.2 days

Since the question asks for the range in which the processing time falls, the best choice is B: More than 3 but less than or equal to 4 days.

An Accounting Firm Is Capable of Processing 20 Income Tax