Introduction:
Manufacturing Cycle Time (MCT): Manufacturing cycle time refers to the time required in converting raw material into finished goods. It is the sum of Process time, Move time, Inspection time, and Queue time.
• Process time: This is the time required for conversion of raw materials into finished goods.
• Move time: The time during which an order moves from one workstation to the next.
• Inspection time: The time spent in examining a product to confirm quality standards.
• Queue time: The waiting time for a job in front of workstations before being processed.
Manufacturing cycle efficiency (MCE): It is the percentage of the time spent in value added activities during manufacturing process.
To Calculate:
Requirement 1: Manufacturing Cycle Time
Answer to Problem 18E
Solution:
Manufacturing Cycle Time = 15 days
Explanation of Solution
Requirement 2: Manufacturing Cycle Efficiency (MCE)
Answer to Problem 18E
Solution:
Manufacturing Cycle Efficiency = 40%
Explanation of Solution
Requirement 3: Manufacturing Cycle Efficiency (MCE) when manufacturing cycle time is reduced
Answer to Problem 18E
Solution:
Manufacturing Cycle Efficiency = 54%
Explanation of Solution
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Chapter 24 Solutions
Fundamental Accounting Principles
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