Prior to Installing a JIT System, Clarendon Company Used Machine

question 88

Multiple Choice

Prior to installing a JIT system, Clarendon Company used machine hours to assign maintenance costs to its three products of 6-inch, 8-inch, and 11-inch insulation. The maintenance costs totaled $400,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: After installing JIT, three manufacturing cells were created and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $400,000; however, these costs are now traceable to each cell.
After installing JIT, the maintenance cost per roll of 6-inch insulation would be

• A) $1.28.
• B) $3.20.
• C) $2.84.
• D) $2.56.

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Definitions:

Intraorganizational Bargaining

Negotiation processes that occur within an organization, typically involving internal groups or departments rather than between employers and external unions.

Distributive Bargaining

A negotiation method focused on dividing a fixed amount of resources, often seen as a win-lose situation.

Distributive Bargaining

A negotiation strategy where one party's gain is the other party's loss, often focused on dividing a fixed resource or amount.

Negative Settlement Range

A situation in negotiations where the minimum offer of the seller is higher than the maximum offer of the buyer, leading to no agreement zone.