Figure 15-2 the Following Information Relates to Cranmore Manufacturing

question 85

Multiple Choice

Figure 15-2 The following information relates to Cranmore Manufacturing:
To produce a unit of product:
There is a wait time of 5 minutes before the cutting department begins a batch, 15 minutes between the cutting and welding departments, a move and pre-wait between welding and polishing of 12 minutes, and a move and pre-wait between the polishing and finishing departments of 8 minutes.
Refer to Figure 15-2. What is the cycle time of operation?

• A) 60 minutes
• B) 20 minutes
• C) 35 minutes
• D) 16 minutes

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Definitions:

Direct Labor Hours

The total hours worked directly on a product or service by employees in the production process.

Overhead Rate

A measure used to allocate overhead costs to produced goods, calculated by dividing total overheads by an allocation base, such as labor hours.

Departmental Overhead Rates

Specific rates used to allocate overhead costs to different departments within a company based on varying criteria.

Machine Hours

represent a measure of the amount of time a machine is in operation, used in costing to allocate expenses based on the use of machinery.