Answered: postal sorting operation in a time…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

A postal sorting operation in a time study yielded an average time of 4.75 minutes per hundred letters sorted, a performance rating of 110%, and tolerances of 80 minutes over an eight-hour shift. Required: Calculate a labor standard for the

a) card sorting operation.

b) If a postal employee were to handle only that operation, how many hundreds of letters in an eight-hour shift could be sorted under normal operating conditions?

c)If the labor rate is $15 per hour, what figure should the accounting department use as the standard labor cost per hundred letters?

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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