A local market research i rm has just won a contract for several thousand small projectsinvolving data gathering and statistical analysis. In the past, the i rm has assigned eachproject to a single member of its highly trained professional staff. This person would bothgather and analyze the data. Using this approach, an experienced person can complete anaverage of 10 such projects in an eight-hour day.The firm’s management is thinking of assigning two people to each project in order toallow them to specialize and become more efi cient. The process would require the datagatherer to i ll out a matrix on the computer, check it, and transmit it to the statisticalanalysis program for the analyst to complete. Data can be gathered on one project whilethe analysis is being completed on another, but the analysis must be complete before thestatistical analysis program can accept the new data. After some practice, the new processcan be completed with a standard time of 20 minutes for the data gathering and 30 minutesfor the analysis.a. What is the production (output per hour) for each alternative? What is the productivity(output per labor hour)?b. How long would it take to complete 1,000 projects with each alternative? Whatwould be the labor content (total number of labor hours) for 1,000 projects for eachalternative?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 33P: Biotechtron, Inc., has two research laboratories in the Southwest, one in Yuma, Arizona, and the...

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A local market research i rm has just won a contract for several thousand small projects
involving data gathering and statistical analysis. In the past, the i rm has assigned each
project to a single member of its highly trained professional staff. This person would both
gather and analyze the data. Using this approach, an experienced person can complete an
average of 10 such projects in an eight-hour day.
The firm’s management is thinking of assigning two people to each project in order to
allow them to specialize and become more efi cient. The process would require the data
gatherer to i ll out a matrix on the computer, check it, and transmit it to the statistical
analysis program for the analyst to complete. Data can be gathered on one project while
the analysis is being completed on another, but the analysis must be complete before the
statistical analysis program can accept the new data. After some practice, the new process
can be completed with a standard time of 20 minutes for the data gathering and 30 minutes
for the analysis.
a. What is the production (output per hour) for each alternative? What is the productivity
(output per labor hour)?
b. How long would it take to complete 1,000 projects with each alternative? What
would be the labor content (total number of labor hours) for 1,000 projects for each
alternative?

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