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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 17
Cycle Time and Velocity, MCE
Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce 243,000 laptops per quarter but currently produces 91,125 units. The conversion cost per quarter is $7,290,000. There are 60,750 production hours available within the plant per quarter. In addition to the processing minutes per unit used, the production of the laptops uses 10 minutes of move time, 20minutes of wait time, and 5minutes of rework time. (All work is done by cell workers.)
Required:
1. Compute the theoretical and actual velocities (per hour) and the theoretical and actual cycle times (minutes per unit produced).
2. Compute the ideal and actual amounts of conversion cost assigned per laptop.
3. Calculate MCE. How does MCE relate to the conversion cost per laptop?
Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce 243,000 laptops per quarter but currently produces 91,125 units. The conversion cost per quarter is $7,290,000. There are 60,750 production hours available within the plant per quarter. In addition to the processing minutes per unit used, the production of the laptops uses 10 minutes of move time, 20minutes of wait time, and 5minutes of rework time. (All work is done by cell workers.)
Required:
1. Compute the theoretical and actual velocities (per hour) and the theoretical and actual cycle times (minutes per unit produced).
2. Compute the ideal and actual amounts of conversion cost assigned per laptop.
3. Calculate MCE. How does MCE relate to the conversion cost per laptop?
Explanation
Verified
Verified
Cycle time:
Cycle time is the time it t...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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