Problem $3(20$ Points$)$

Detroit Manufacturing Company $($DMC$)$ has developed a product which incorporates new features with a standard

product design. A production protorype bas been built and the Methods Department has developed a job design for the

production of the new product. Elemental times were taken from DMC$\text{'}$s Standard Data System and then checked with a

stop$-$watch stody. DMC works a $8$ hour day, $5$ days a week and provides workers a $90$ minute daily allowance for personal

time and other contingencies. Daily standards are calculated as the normal time for the job divided by $1-\%$ Allowance.

Production workers eam $$14\mathrm{.}25$ per hour. Below is a summary of the methods Department's stop$-$watch study.

A$.$ Using the time study data collected, develop a standard time for this job. State

the standard in parts per hour. $($carryetjur answer out to two decimal places$)$

B$.$ What is the carrent weekly nominal capacity for a production worker who works at $115\%$ of standard with an

average scrap rate of $4\%?$

C$.$ Assuming there are $15$ workers producing this product, what rate of efficiency must the workers average if

they are to meet a weekly demand of $2,600$ units given an average scrap rate is $4\%?$

D$.$ The Sales Department is about to sign a contract for $5000$ mits of prodact #$4356.$ The customer is demanding

a contract price of $$80,000$ for the units. If fixed costs $($overhead$)$ is assessed at $150\%$ of the sum of direct

labor cost and material cost per unit, and the direct material cost is $$1\mathrm{.}25$ per unit, what is the profit

contribution $($or loss$)$ to the company for accepting this contract?

$(5$ pts Each$)$