ABC made upgrades to the production process and achieved a 25%increase in production with less raw material. At the same time,however, an additional employee had to be hired. Under the oldprocess, 5 employees could produce 60 pieces per hour at a cost of$16/piece of raw material. With the new process, the cost of the rawmaterial has been reduced to $10 per piece. The direct labor cost is$12/hour per person and overhead is calculated at 1.6 times thedirect labor cost. The finished products are sold at a price of $31each.Calculate the increase in productivity that has occurred byimproving the production process.

Old process:5 employees produce 60 pieces per hour.Cost per piece = $16New process:Additional…

Answered: ABC made upgrades to the production…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Creative Cabinets Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplished this, the company has gathered the following production cost data: ANNUALIZED VARIABLE COSTS PER UNIT PROCESS TYPE FC LABOR MATERIAL ENERGY MASS CUSTOMIZATION $1,260,000 30 18 17 INTERMITTENT 1,000,000 34 16 20 REPETITIVE 1,425,000 28 20 15 CONTINUOUS 1,600,000 25 25 13 Creative Cabinets projects an annual demand of 18,000 units for the maxistand. The maxistand will sell for $195 per unit. What is the difference between the highest and lowest profit. Select one: a. P304k b. P744k c. P474k d. P299k
A company has introduced a process improvement that reduces processing time for each unit, so that output is increased by 20% with less material, but one additional worker required. Under the old process, five workers could produce 55 units per hour. Labor costs are $13/hour, and material input was previously $15/unit. For the new process, material is now $10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each. What increase in productivity is associated with the process improvement?
company has introduced a process improvement that reduces processing time for each unit;output is increased by 40 percent with less material, but two additional workers are required.Under the old process, five workers could produce 1800 units per hour. Labor costs are $20/hour, and material input was previously $15/unit. For the new process, material is now $12/unit. *Overhead is charged at (1.4XLABOR COST + 500). *Finished units sell for $80 each. QUESTION: What increase in productivity is associated with the process improvement?
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The Big Black Bird Company (BBBC) has a large order for special plastic-lined military uniforms to be used in an urgent military operation. Working the normal two shifts of 40 hours each per week, the BBBC production process usually produces 2,400 uniforms per week at a standard cost of $140 each. 70 employees work the first shift and 28 the second. The contract price is $200 per uniform. Because of the urgent need, BBBC is authorized to use around-the-clock production six days per week. When each of the two shifts works 72 hours per week, production increases to 4,000 uniforms per week but at a cost of $144 each. The multifactor productivity level decreased for two shifts working 72 hours when compared to the level of the normal two shifts. The multifactor productivity ratio based on the normal two shifts changed by ___% as compared to two shifts working 72 hours per week. (Enter your response rounded to two decimal places.) Part 4 The labor productivity level decreased for…
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