Setup Time for a Product Is 12 Hours

question 108

Multiple Choice

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labor is $6 per hour. The non-value-added costs are

• A)$72.
• B)$66.
• C)$12.
• D)$6.

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Definitions:

Least Costly Way

The most efficient method of achieving a desired outcome or producing a good or service, minimizing expenses while meeting specified objectives.

Economic Efficiency

A condition where resources are allocated in a way that maximizes the net benefit to society.

Runs Out

A situation where a supply or quantity of something is completely used up or exhausted.

Next Century

A future period of 100 years, used to forecast or plan long-term visions or developments.