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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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(Appendix 11A) Cycle Time and Velocity, Manufacturing Cycle Efficiency

A company like Kicker performs warranty repair work on speakers in a manufacturing cell. The typical warranty repair involves taking the defective speaker apart, testing the components, and replacing the defective components. The maximum capacity of the cell is 1,000 repairs per month. There are 500 production hours available per month.

Required:

  1. 1. Compute the theoretical velocity (per hour) and the theoretical cycle time (minutes per unit repaired).
  2. 2. Speaker repair uses 4 minutes of move time, 10 minutes of wait time, and 6 minutes of inspection time. Calculate the MCE.
  3. 3. Using the information from Requirement 2, calculate the actual cycle time and the actual velocity for speaker repair.

1.

To determine

Calculate theoretical velocity (per hour) and theoretical cycle time (minutes per unit repaired).

Explanation

Cycle Time and Velocity:

Cycle time is the activity performance measure that calculates the duration of time which is required to manufacture one unit of product. Velocity refers to the number of units that are manufactured in the given duration of time. For example, output per hour.

Use the following formula to calculate theoretical velocity:

Theoretical velocity=Maximum capacityProduction hours available

Substitute 1,000 repairs for maximum capacity and 500 hours for the production hours available in the above formula.

Theoretical velocity=1,000 repairs500 hours=2 repairs per hour

Therefore, the theoretical velocity is 2 repairs per hour

2.

To determine

Calculate MCE.

3.

To determine

Calculate actual cycle time and actual velocity.

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