Question: A manufacturing cell has the theoretical capability to produce 30,000 stereo speakers per quarter. The conversion cost per quarter is $60,000. There are 5,000 production

A manufacturing cell has the theoretical capability to produce 30,000 stereo speakers per quarter. The conversion cost per quarter is $60,000. There are 5,000 production hours avail¬

able within the cell per quarter.

Required:

1. Compute the theoretical velocity (per hour) and the theoretical cycle time (minutes per unit produced).

2. Compute the ideal amount of conversion cost that will be assigned per speaker.

3. Speaker production uses 2 minutes of move time, 1 minute of wait time, and 2 minutes of inspection time. Compute the amount of conversion cost actually assigned to each speaker. Now calculate MCE.

4. Based on your analysis in Requirements 2 and 3, how much nonvalue-added time is being used? How much is it costing per speaker?

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