Jay Bole Is in the Process of Developing a Standard

question 101

Multiple Choice

Jay Bole is in the process of developing a standard for the labour cost of one unit of Product X. According to the design manual, it takes a skilled worker 30 minutes to produce one unit of Product X when the workshop is operating at peak condition. However, Product X is quite complex and even a skilled worker operating in high efficiency often needs another 5 minutes to adjust the tools, re-oil the machine and rework some aspects of the product. A skilled worker is paid $30 per hour, while the company pays 20 per cent on-costs on top of this.
Jay decides to develop a perfection standard. The standard labour cost for one unit of Product X is

• A) $15.
• B) $17.50.
• C) $18.
• D) $21.

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Definitions:

Multiplier

A factor by which an investment increases in value or an economic measurement reflects the impact of a particular action or policy in the broader economy.

Hong Kong Dollars

The official currency of Hong Kong, which is a Special Administrative Region of China.

Futures Price

The agreed-upon price between buyer and seller for the future delivery of an asset, utilized in future contracts.

Risk-free Rate

The theoretical return of an investment with zero risk, typically represented by the yield of government bonds of a stable country.