A team of 12 men is employed to unload material from lorries delivering agricultural produce from different sources. The team works for a 4-hour period each day, during which 16 lorries arrive (4 in each hour). It takes 12 minutes to unload a lorry and each lorry is unloaded on a FIFO basis by all 12 men working as a team. When lorries are in the system for more than 30 minutes, they are compensated at the rate of £3.00 per hour. The members of the team are each paid £10 for the 4- hour period and it has been proposed that it would be more profitable to increase the size of the team to 16 men, when the unloading time would be reduced to 10 minutes per lorry. You are required to calculate the cost of the present system and that of the proposed system and then to discuss the results.
A team of 12 men is employed to unload material from lorries delivering agricultural produce from different sources. The team works for a 4-hour period each day, during which 16 lorries arrive (4 in each hour). It takes 12 minutes to unload a lorry and each lorry is unloaded on a FIFO basis by all 12 men working as a team. When lorries are in the system for more than 30 minutes, they are compensated at the rate of £3.00 per hour. The members of the team are each paid £10 for the 4- hour period and it has been proposed that it would be more profitable to increase the size of the team to 16 men, when the unloading time would be reduced to 10 minutes per lorry. You are required to calculate the cost of the present system and that of the proposed system and then to discuss the results.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
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A team of 12 men is employed to unload material from lorries delivering agricultural produce from
different sources. The team works for a 4-hour period each day, during which 16 lorries arrive (4 in
each hour). It takes 12 minutes to unload a lorry and each lorry is unloaded on a FIFO basis by all 12
men working as a team. When lorries are in the system for more than 30 minutes, they are
compensated at the rate of £3.00 per hour. The members of the team are each paid £10 for the 4-
hour period and it has been proposed that it would be more profitable to increase the size of the
team to 16 men, when the unloading time would be reduced to 10 minutes per lorry. You are
required to calculate the cost of the present system and that of the proposed system and then to
discuss the results.
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