A firm has redesigned its production process - it now takes 10 hours for a unit to
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Question:
A firm has redesigned its production process - it now takes 10 hours for a unit to be made (flow time or throughput time), whereas earlier it took 15 hours.
If the process completes one unit per hour on average (this is cycle time, the same now and earlier), and each unit is worth $4,500 (on average throughout the production line), what is the reduction in work-in-process value (in dollars)?
Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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