A company manufacturing automobiles decides to make a particular item A in batches. Following data are available:
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Question:
A company manufacturing automobiles decides to make a particular item A in batches. Following data are available:
(a) Cost of setting-up special toolings: Rs 900
(b) Annual rate of interest, depreciation, etc. : 20%
(c) Consumption of parts in assembly shop : Rs 60 per month
(d) Processing of each item takes 4 hours on the machine. Labour rate is Rs 24 per 8 hour-day. Material cost: Rs 9 per item. Overhead expenditure calculated on prime cost is 150 per cent.
Find out the economic batch size for machining. Also calculate the duration of batch run, assuming that machine loading factor is 90 per cent.
Related Book For
Cost Management Measuring Monitoring And Motivating Performance
ISBN: 9781118168875
2nd Canadian Edition
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook
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