Jefferson Companys demand for its only product exceeds its manufacturing capacity. The company provided the following information
Question:
Jefferson Company’s demand for its only product exceeds its manufacturing capacity. The company provided the following information for the machine whose limited capacity is prohibiting the company from producing and selling additional units.
Actual run time this week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900 minutes
Machine time available per week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000 minutes
Actual run rate this week. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 units per minute
Ideal run rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 units per minute
Defect-free output this week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,827 units
Total output this week (including defects) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,620 units
Required:
1. Compute the utilization rate.
2. Compute the efficiency rate
3. Compute the quality rate
4. Compute the overall equipment effectiveness (OEE).
Step by Step Answer:
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer