Brandon's Computer Shop Has Hired a Consultant to Help Apply

question 125

Essay

Brandon's computer shop has hired a consultant to help apply operation management techniques to increase profits. Currently the shop sells most of its computers to a high-end customized online retailer and sales are steady at 250 per month. A single work cell produces the computers. To produce the computer three operations are required. First the parts must be assembled, next software must be installed, and finally the computer must be safely packed and labeled for shipping. These operations take 2 hours, 5 hours, and 1 hour respectively. If there are 6 available work hours each day and the shop operates 20 days per month find:
A: The takt time
B: The number of workers Brandon should hire

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Definitions:

Unit Product Cost

The total cost assigned to a single unit of product, encompassing direct materials, direct labor, and manufacturing overhead.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Production Cost

The total expense incurred in manufacturing goods, including materials, labor, and overhead costs.

Variable Overhead

The costs that fluctuate with the level of production or business activity, such as utilities or materials.