Fundamental Accounting Principles
Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
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Chapter D, Problem 13DQ
To determine

Concept:

Manufacturing Cycle Time and Efficiency:

It is an internal business performance parameter with respect to manufacturing processes and industries. It measures the total time taken by value added activities in relation to the throughput time.

Throughput time is the sum of time taken by value adding and non-value adding activities in the manufacturing process.

Examples of Value added activities − Process based activities.

Examples of Non Value added activities − Inspection of goods, Movement of raw materials , Queuing in production process etc.

If management can use Manufacturing Cycle Time and Efficiency as performance measures.

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