Sample Observations of a Claims Processor Made Over a 160-Hour

question 14

Multiple Choice

Sample observations of a claims processor made over a 160-hour work month reveal that the worker produced a total of 384 completed claims forms.The performance rating was 80%.The worker was idle 20% of the time (so that idle time should be subtracted from the total time when computing the average observed time) .The allowance factor is 8%.What is the normal time per unit?

• A)0.42 minutes
• B)16.0 minutes
• C)17.4 minutes
• D)20.0 minutes
• E)21.7 minutes

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Definitions:

Factory Depreciation

The decrease in value of factory-related assets, such as buildings and machinery, over time due to wear and tear.

Factory Overhead

Indirect manufacturing costs that are not directly tied to the production process, such as maintenance, utilities, and salaries of the manufacturing supervisors.

Job Order Cost System

An accounting method that tracks costs specifically associated with a job or project.

Custom Products

Goods that are tailored or made-to-order according to the specific requirements of customers.