Gutsen Communications Inc The Partial Operational Productivity Ratio of DTV-12 in 2019 Is

question 77

Multiple Choice

Gutsen Communications Inc. manufactures a scrambling device for cellular phones. The main component of the scrambling device is a very delicate part—DTV-12. DTV-12 requires careful handlings during manufacturing. Once damaged, the part must be discarded. Only skilled laborers are hired to manufacture and install DTV-12. Damages still occur, however. The following are the operating data of Gutsen Communications Inc. for 2018 and 2019 relative to the insertion of DTV-12. Round calculations to 2 significant digits. $\begin{array}{lrr} & {2018} &{2019} \\\text { Number of phones manufactured } & 600,000 & 780,000 \\\text { Units of DTV-12 used } & 960,000 & 1,072,500 \\\text { Direct labor hours for DTV-12 insertion } & 1,800 & 2,600 \\\text { Total cost of DTV-12 units } & \$ 1,443,750 & \$ 2,333,750\\\text { Direct labor wage rate per hour }&\$67&\$82\end{array}$ The partial operational productivity ratio of DTV-12 in 2019 is:

• A) 0.63 per unit.
• B) 0.73 per unit.
• C) 1.92 per unit.
• D) 3.00 per unit.
• E) 3.33 per unit.

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Definitions:

Manufacturing Costs

Expenses directly related to the production of goods, including labor, materials, and overhead.

Markup

A percentage added to the cost price of goods to cover overhead and profit.

Selling Price

Selling price is the amount of money a buyer pays to purchase a product or service from a seller.

Manufacturing Costs

The total expense involved in the creation of a product, including raw materials, labor, and overhead costs.