Prior to Installing a JIT System, Grindstone Company Used Machine

question 54

Multiple Choice

Prior to installing a JIT system, Grindstone Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 9-inch insulation. The maintenance costs totaled $432,000 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 $432,000; however, these costs are now traceable to each cell.
The maintenance cost per roll of 4-inch insulation before JIT is installed would be

• A) $11.25.
• B) $6.00.
• C) $7.75.
• D) $3.00.

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