The Gantry Company Collected the Following Information (In Days) for November

question 13

Essay

The Gantry Company collected the following information (in days) for November and December:
$$\begin{array} { | l | r | r | } \hline & \text { November } & { \text { December } } \\\hline \text { Transporting product } & 2.0 & 3.0 \\\hline \text { Processing product } & 15.0 & 18.0 \\\hline \text { Inspecting product } & 1.0 & 1.2 \\\hline \text { Storing product } & 8 . 0 & 7.0\\\hline\end{array}$$
Required:
a. Calculate the manufacturing cycle efficiency for November and December.
b. Assume January's processing time will be the same as December. If Gantry's target for manufacturing cycle efficiency is 65%, what will be January's target for non-processing times?

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Definitions:

Predetermined Overhead Rate

A predetermined overhead rate is calculated by dividing estimated manufacturing overhead costs by an allocation base, used to assign overhead costs to products.

Fixed Manufacturing Overhead

Indirect manufacturing costs that do not vary with the level of production, such as salaries of managers and depreciation of factory equipment.

Variable Manufacturing Overhead

Costs associated with manufacturing that vary directly with the levels of production output, such as raw materials and labor.

Overhead Applied

The allocated manufacturing overhead costs to individual products or jobs based on a predetermined rate.