Kilmer Company's customer demand for its only product exceeds its manufacturing capacity. The compa nformation for the machine whose limited capacity is prohibiting the company from producing and sellin Actual run time this week Machine time available per week Actual run rate this week Ideal run rate Defect-free output this week Total output this week (including defects) Required: and 2 With the 18,550 minutes 26,500 minutes 4.20 units per minute 6 units per minute 54,537 units 77,910 units do Querall couinmont offectiveness calculate the following

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Problem 12-12 (Algo) Overall Equipment Effectiveness [LO12–3]**

Kilmer Company’s customer demand for its only product exceeds its manufacturing capacity. The company provided the following information for the machine whose limited capacity is prohibiting the company from producing and selling additional units:

- **Actual run time this week**: 18,550 minutes
- **Machine time available per week**: 26,500 minutes
- **Actual run rate this week**: 4.20 units per minute
- **Ideal run rate**: 6 units per minute
- **Defect-free output this week**: 54,537 units
- **Total output this week (including defects)**: 77,910 units

**Required:**
1. With respect to the company’s overall equipment effectiveness, calculate the following:
   - 1-a. Utilization rate
   - 1-b. Efficiency rate
   - 1-c. Quality rate
   - 1-d. Overall equipment effectiveness

2. Calculate the following losses:
   - 2-a. Utilization loss in units
   - 2-b. Efficiency loss in units
   - 2-c. Quality loss in units

**Note**: Do not round intermediate calculations. Round final answers to 2 decimal places and "Units" answers to the nearest whole number.

**Table for Calculations:**

| Calculation                          | Result          |
|--------------------------------------|-----------------|
| 1-a. Utilization rate                |                 |
| 1-b. Efficiency rate                 |                 |
| 1-c. Quality rate                    |                 |
| 1-d. Overall equipment effectiveness |                 |
| 2-a. Utilization loss in units       |                 |
| 2-b. Efficiency loss in units        |                 |
| 2-c. Quality loss in units           |                 |
Transcribed Image Text:**Problem 12-12 (Algo) Overall Equipment Effectiveness [LO12–3]** Kilmer Company’s customer demand for its only product exceeds its manufacturing capacity. The company provided the following information for the machine whose limited capacity is prohibiting the company from producing and selling additional units: - **Actual run time this week**: 18,550 minutes - **Machine time available per week**: 26,500 minutes - **Actual run rate this week**: 4.20 units per minute - **Ideal run rate**: 6 units per minute - **Defect-free output this week**: 54,537 units - **Total output this week (including defects)**: 77,910 units **Required:** 1. With respect to the company’s overall equipment effectiveness, calculate the following: - 1-a. Utilization rate - 1-b. Efficiency rate - 1-c. Quality rate - 1-d. Overall equipment effectiveness 2. Calculate the following losses: - 2-a. Utilization loss in units - 2-b. Efficiency loss in units - 2-c. Quality loss in units **Note**: Do not round intermediate calculations. Round final answers to 2 decimal places and "Units" answers to the nearest whole number. **Table for Calculations:** | Calculation | Result | |--------------------------------------|-----------------| | 1-a. Utilization rate | | | 1-b. Efficiency rate | | | 1-c. Quality rate | | | 1-d. Overall equipment effectiveness | | | 2-a. Utilization loss in units | | | 2-b. Efficiency loss in units | | | 2-c. Quality loss in units | |
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