Better Buy Inc. produces equipment in a three-department operation: Department 1 is labor intensive and Department 2

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Better Buy Inc. produces equipment in a three-department operation: Department 1 is labor intensive and Department 2 and 3 are highly automated. The average output of Department 1 is 56 units per hour. Units from Department 1 are transferred to Department 2 (which manufactures a maximum of 48 units per hour) and then to Department 3 (which manufactures a maximum of 55 units per hour).

Department One produced the following units: first hour: 48 units, second hour: 60 units, third hour: 55 units, and fourth hour: 49 units.

a. Which department is the bottleneck in the manufacturing process?

b. How much inventory is on hand in the bottleneck operation at the end of four hours?

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Cost Accounting Foundations And Evolutions

ISBN: 9781618533531

10th Edition

Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn

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