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Sample Observations of a Claims Processor Made Over a 160-Hour

question 14

Multiple Choice

Sample observations of a claims processor made over a 160-hour work month reveal that the worker produced a total of 384 completed claims forms.The performance rating was 80%.The worker was idle 20% of the time (so that idle time should be subtracted from the total time when computing the average observed time) .The allowance factor is 8%.What is the normal time per unit?

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Definitions:

Variable Direct Labor Cost

Costs associated with labor that vary directly with the level of production output.

Fixed Factory Overhead Cost

Costs related to the operation of a manufacturing facility that do not vary with production volume, such as rent, salaries, and insurance.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Target Cost Approach

A pricing method where the selling price is set first, and then the target cost is determined by subtracting a desired profit margin.

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