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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Worldwide Corporation is a highly automated manufacturing firm. The vice president of finance has decided that traditional standards are inappropriate for performance measures in an automated environment. Labor is significant in terms of the total cost of production and tends to be fixed, material quality is considered more important than minimizing material cost and customer satisfaction is the number one priority. As a result, delivery performance measures have been chosen to evaluate performance. The following information is considered typical of the time involved to complete orders:

- Wait time:

-From order being placed to

start of production

-From start of production to 10.0 days

completion

- Inspection time 1.5 days

- Process time 3.0 days

- Move time 2.5 days

1. What is the manufacturing cycle efficiency for this order?

25.0%

13.6%

37.5 %

69.2%

2. What is the delivery cycle time for this order?

7 days

12 days

15 days

22 days

INDICATE THE SOLUTION.

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