Posted: July 7th, 2016
24. What is the partial operational productivity measure for materials for 2010?
a. 3.2000
b. 3.2500
c. 0.3077
d. 0.3125
Information about Cheng Corporation is as follows:
2009 2010
Output (units) 14,000 15,000
Selling price per unit $16 $16
Input quantities:
Materials (pounds) 1,750 1,900
Labor (hours) 1,400 1,525
Input prices:
Materials (per pound) $3 $4
Labor (per hour) $6 $7
25. By how much did profits change as a result of changes in productivity related to materials?
a. $600 decrease
b. $600 increase
c. $100 decrease
d. $100 increase
SECTION II ()
1. Prior to installing a JIT system, Johnson Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 8-inch plastic pipe.
The maintenance costs totaled $540,000 per year. The machine hours used by each product and the quantity produced of each product are as follows:
Machine Hours Quantity Produced
4-inch 10,000 3,750 rolls
6-inch 14,000 4,000 rolls
8-inch 21,000 5,000 rolls
After installing JIT, three manufacturing cells were created, and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $540,000; however, these costs are now traceable to each cell.
Cell, 4-inch $ 90,000
Cell, 6-inch 160,000
Cell, 8-inch 290,000
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