Alpha, Inc

question 40

Multiple Choice

Alpha, Inc., manufactures Product A. The setup time for each unit of Product A is 8 hours. Gamma, Inc., that uses the just-in-time system and produces the same product has reduced setup time by 1 hour. Setup labor is $35 per hour. If Alpha wants to reduce non-value-added costs by 30 percent next year, compute the currently attainable standard for setup time. (Round answer to one decimal place.)

• A)4.5 hours
• B)7.3 hours
• C)6.2 hours
• D)5.9 hours

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Definitions:

Televisions

Electronic devices designed for the reception and display of audiovisual content transmitted over airwaves or through cable systems.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, enabling more efficient trade.

Opportunity Cost

Forgoing potential profits from various options by deciding on a specific alternative.

Coffee

A beverage made from roasted and ground seeds of the coffee plant, known for its stimulating effect due to caffeine content.