Miles Industries makes a number of different molds used by other manufacturing companies to produce plastic products. The molds are made using special numerically controlled equipment that can be very sensitive to vibration and run speeds. The following is a list of the activities undertaken to produce a set of molds for one customer.

It takes three minutes on the machine to make one good mold. The molds normally sell for $75. In sorting out good from bad units, 80% were good units and 20% were bad.

REQUIRED:

a. Calculate the total elapsed time in this cycle.

b. Calculate the process time in this cycle. What percentage of time is used for process activities?

c. Determine how many molds were successfully made during the afternoon shift.

d. Calculate the total cost of the operations.

e. Calculate the average cost of a good mold.

f. Calculate the total process costs of operations. What percentage of cost is used by process activities?

g. Develop a rough profit analysis for the afternoon’s operations. Specifically, using the times and prices noted, determine how much revenue was generated by the afternoon’s production vs. how much cost was incurred. Set up your analysis as follows:

Revenue

Less: Process costs

Potential profit

Less: Non process costs

Profit (loss) for morning shift

h. What would you say to Miles Industries about its operations? Why?

Transcribed Image Text:

Activity Time Cost Retrieve materials from stores 20 minutes $20.00 Input numerical codes 40 minutes $360.00 Calibrate machine Bminutes $200 Produce 30 minutes $240.00 Recalibrate machine 5minutes $20.0