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Each Unit of Product Requires 16 Pounds of Material

question 65

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Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs £6 per pound. If the company wants to reduce nonvalue-added costs by 25 percent next year, the currently attainable standard for material would be


Definitions:

Fraction

A numerical quantity that is not a whole number, representing a part of a whole.

Numerator

The top part of a fraction, representing the number of parts out of the whole indicated by the denominator.

Denominator

The number below the line in a fraction, representing the total number of equal parts the numerator is divided into.

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