Cycle Time and Conversion Cost per Unit Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 40 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are $1,296,000 per year. The total labor minutes available are 144,000. During the year, the cell was able to produce 0.3 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. per unit 2. Compute the applied conversion cost per unit (the amount of conversion cost actually assigned to the product). per unit 3. Briefly explain how Hatch Manufacturing might further benefit from its accountants utilizing prescriptive data analytics (see Exhibit 2.6 for a review of data analytic types). The accountants appear to have utilized data analytics to understand the drivers of costs as well as minutes per unit, then conversion costs would be reduced from $1,800 per unit to $1,350 per unit. A logical next step would be for the accountants to utilize data analytics to identify specific process reengineering actions. analytics to forecast that if current cycle time could be reduced from 200 minutes per unit to 150
Cycle Time and Conversion Cost per Unit Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 40 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are $1,296,000 per year. The total labor minutes available are 144,000. During the year, the cell was able to produce 0.3 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. per unit 2. Compute the applied conversion cost per unit (the amount of conversion cost actually assigned to the product). per unit 3. Briefly explain how Hatch Manufacturing might further benefit from its accountants utilizing prescriptive data analytics (see Exhibit 2.6 for a review of data analytic types). The accountants appear to have utilized data analytics to understand the drivers of costs as well as minutes per unit, then conversion costs would be reduced from $1,800 per unit to $1,350 per unit. A logical next step would be for the accountants to utilize data analytics to identify specific process reengineering actions. analytics to forecast that if current cycle time could be reduced from 200 minutes per unit to 150
Chapter1: Financial Statements And Business Decisions
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![**Cycle Time and Conversion Cost per Unit**
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 40 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are $1,296,000 per year. The total labor minutes available are 144,000. During the year, the cell was able to produce 0.3 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs.
**Required:**
1. **Compute the theoretical conversion cost per unit.**
$______ per unit
2. **Compute the applied conversion cost per unit** (the amount of conversion cost actually assigned to the product).
$______ per unit
3. **Briefly explain how Hatch Manufacturing might further benefit from its accountants utilizing prescriptive data analytics** (see Exhibit 2.6 for a review of data analytic types).
The accountants appear to have utilized [dropdown option: descriptive, predictive, diagnostic, prescriptive] data analytics to understand the drivers of costs as well as [dropdown option: descriptive, predictive, diagnostic, prescriptive] analytics to forecast that if current cycle time could be reduced from 200 minutes per unit to 150 minutes per unit, then conversion costs would be reduced from $1,800 per unit to $1,350 per unit.
A logical next step would be for the accountants to utilize [dropdown option: descriptive, predictive, diagnostic, prescriptive] data analytics to identify specific process reengineering actions.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5e61f1c8-5f75-42be-83a4-b313e68cb3a1%2F2d222fb9-5354-44da-ae64-3250382a3a47%2Fwmleiwv_processed.png&w=3840&q=75)
Transcribed Image Text:**Cycle Time and Conversion Cost per Unit**
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 40 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are $1,296,000 per year. The total labor minutes available are 144,000. During the year, the cell was able to produce 0.3 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs.
**Required:**
1. **Compute the theoretical conversion cost per unit.**
$______ per unit
2. **Compute the applied conversion cost per unit** (the amount of conversion cost actually assigned to the product).
$______ per unit
3. **Briefly explain how Hatch Manufacturing might further benefit from its accountants utilizing prescriptive data analytics** (see Exhibit 2.6 for a review of data analytic types).
The accountants appear to have utilized [dropdown option: descriptive, predictive, diagnostic, prescriptive] data analytics to understand the drivers of costs as well as [dropdown option: descriptive, predictive, diagnostic, prescriptive] analytics to forecast that if current cycle time could be reduced from 200 minutes per unit to 150 minutes per unit, then conversion costs would be reduced from $1,800 per unit to $1,350 per unit.
A logical next step would be for the accountants to utilize [dropdown option: descriptive, predictive, diagnostic, prescriptive] data analytics to identify specific process reengineering actions.
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