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: Machine Hours Quantity Produced 4-inch 5,000 15,000 rolls 6-inch 12,000 12,500 rolls 9-inch 7,000 11,200 rolls 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. Cell, 4-inch $125,000 Cell, 6-inch 175,000 Cell, 9-inch 165,000 After installing JIT, the maintenance cost per roll of 6-inch insulation is a. $12.85. b. $8.67. c. $14.00. d. $17.00.
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: Machine Hours Quantity Produced 4-inch 5,000 15,000 rolls 6-inch 12,000 12,500 rolls 9-inch 7,000 11,200 rolls 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. Cell, 4-inch $125,000 Cell, 6-inch 175,000 Cell, 9-inch 165,000 After installing JIT, the maintenance cost per roll of 6-inch insulation is a. $12.85. b. $8.67. c. $14.00. d. $17.00.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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:
Machine Hours | Quantity Produced | |||
4-inch | 5,000 | 15,000 rolls | ||
6-inch | 12,000 | 12,500 rolls | ||
9-inch | 7,000 | 11,200 rolls |
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.
Cell, 4-inch | $125,000 |
Cell, 6-inch | 175,000 |
Cell, 9-inch | 165,000 |
After installing JIT, the maintenance cost per roll of 6-inch insulation is
a. $12.85.
b. $8.67.
c. $14.00.
d. $17.00.
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