As Part of Its Quality-Improvement Program, a Company Is Conducting

question 52

Multiple Choice

As part of its quality-improvement program, a company is conducting a time study for a particular job. The time study encompassed 10 job cycles, and the results include the following cumulative times and performance rating factors for each element. An allowance factor of 16% is assumed. The normal cycle time for this job would be

• A) 1.809 minutes.
• B) 2.098 minutes.
• C) 1.530 minutes.
• D) 2.233 minutes.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from a company’s ordinary, core business operations.

Contribution Format

An income statement layout that separates fixed and variable costs, allowing for the calculation of contribution margin and easier analysis of profitability.

Operating Income

A financial metric that shows how much of a company's revenue is left over after paying for variable costs of production like wages and raw materials.

Contribution Format

A method of income statement presentation that separates fixed costs from variable costs to show the contribution margin.