Prior to Installing a JIT System, Clark Company Used Machine

question 95

Multiple Choice

Prior to installing a JIT system, Clark Company used machine hours to assign maintenance costs to its three products of 4-cm, 6-cm, and 9-cm insulation. The maintenance costs totalled $400,000 per year. The machine hours used by each product and the quantity produced of each product are as follows:
$\begin{array}{lcc} &\underline{\text {Machine Hours}}& \underline{\text {Quantity Produced}}\\4 \mathrm{~cm} & 12,000 & 31,250 \mathrm{rolls} \\6 \mathrm{~cm} &20,000 & 25,000 \mathrm{rolls} \\9 \mathrm{~cm} & 18,000 &12,000 \mathrm{rolls}\end{array}$ After installing JIT,three manufacturing cells were created and the cell workers were trained to perform maintenance.Maintenance costs for the three cells still totalled $400,000; however,these costs are now traceable to each cell.
$$\begin{array} { c r } \text { Cell } 4 \mathrm {~cm} & \$ 100,000 \\\text { Cell, } 6 \mathrm {~cm} & 120,000 \\\text { Cell } 9 \mathrm {~cm} & 180,000\end{array}$$
-Refer to the figure.What would be the maintenance cost per roll of 9-cm insulation after installing JIT?

• A)$5.86
• B)$12.50
• C)$12.86
• D)$15.00

---

Definitions:

Earn

To receive payment or reward in exchange for work or services provided.

First Year

The initial period or stage in a specific context, such as a student's first year in college or the first year of operation for a business.

Appearance

The way that someone or something looks, often important in forming impressions in social and professional contexts.

Negative Comments

Remarks or feedback that focus on criticism or highlight flaws and issues, which can impact the recipient's motivation and confidence.