b$.$ The root causes of the activity cost $($such as plant layout, process design, and product design$).$

c$.$ The appropriate cost reduction measure: activity elimination, activity reduction, activity sharing, or activity selection.

Choose "Multiple" in the Root cause column, wherever there is more than one root cause. If required, round your answers to the nearest

dollar.

It takes $45$ minutes and six pounds of material to produce a product using a traditional manufacturing process. A process reengineering study

provided a new manufacturing process design $($using existing technology$)$ that would take $15$ minutes and four pounds of material. The cost

per labor hour is $$12,$ and the cost per pound of material is $$8.$

With its original design, a product requires $15$ hours of setup time. Redesigning the product could reduce the setup time to an absolute

minimum of $30$ minutes. The cost per hour of setup time is $$200.$

A product currently requires eight moves. By redesigning the manufacturing layout, the number of moves can be reduced from eight to zero.

The cost per move is $$10.$

Inspection time for a plant is $8,000$ hours per year. The cost of inspection consists of salaries of four inspectors, totaling $$120,000.$ Inspection

also uses supplies costing $$2$ per inspection hour. A supplier evaluation program, product redesign, and process redesign reduced the need for

inspection by creating a zero$-$defect environment.

Each unit of a product requires five components. The average number of components is $5\mathrm{.}3$ due to component failure, requiring rework and

extra components. By developing relations with the right suppliers and increasing the quality of the purchased component, the average

number of components can be reduced to five components per unit. The cost per component is $$600.$

A plant produces $100$ different electronic products. Each product requires an average of eight components that are purchased externally. The

components are different for each part. By redesigning the products, it is possible to produce the $100$ products so that they all have four

components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand

are $$900,000$ per year.