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All Textbooks Math Horngren’s Cost Accounting Chapter 19 Problem 33

Chapter 19: Problem 33

The Sandstone Corporation uses an injection molding machine to make a plastic product, , after receiving firm orders from its customers. Sandstone
estimates that it will receive 60 orders for during the coming year. Each order of will take 100 hours of machine time. The annual machine capacity is
8,000 hours. 1\. Calculate (a) the average amount of time that an order for will wait in line before it is processed and (b) the average manufacturing cycle
time per order for Z35. 2\. Sandstone is considering introducing a new product, Y21. The company expects it will receive 30 orders of in the coming year.
Each order of will take 40 hours of machine time. Assuming the demand for will not be affected by the introduction of , calculate (a) the average
waiting time for an order received and (b) the average manufacturing cycle time per order for each product, if Sandstone introduces Y21.

Short Answer Expert verified

The average waiting time and manufacturing cycle time for Z35 only are 112.5 hours and 212.5 hours, respectively. If Sandstone introduces Y21, the average waiting times
for Z35 and Y21 are 405 hours and 162 hours, respectively. Consequently, the average manufacturing cycle times for Z35 and Y21 are 505 hours and 202 hours,
respectively.

Step by step solution

01 Calculate machine utilization for Z35 only.
Machine capacity = 8,000 hours Number of orders for Z35 = 60 Machine time per order for Z35 = 100 hours Total machine time for all Z35 orders = Number of orders * Machine time per
order Total machine time for all Z35 orders = 60 * 100 = 6,000 hours Machine utilization for Z35 only = (Total machine time for all Z35 orders/Machine capacity) * 100 Machine utilization for
Z35 only = (6,000/8,000)*100 = 75%

02 Calculate average waiting time and manufacturing cycle time for Z35 only.
(a) Average waiting time for an order for Z35 = (Machine utilization² / (2*(1-Machine utilization))) * Machine time per order Average waiting time for an order for Z35 = (0.75² / (2 * (1 - 0.75)))
* 100 = 112.5 hours (b) Average manufacturing cycle time per order for Z35 = Average waiting time for an order for Z35 + Machine time per order Average manufacturing cycle time per
order for Z35 = 112.5 + 100 = 212.5 hours

03 Calculate machine utilization for both Z35 and Y21.

Number of orders for Y21 = 30 Machine time per order for Y21 = 40 hours Total machine time for all Y21 orders = Number of orders * Machine time per order Total machine time for all Y21
orders = 30 * 40 = 1,200 hours Total machine time for both Z35 orders and Y21 orders = 6,000 + 1,200 = 7,200 hours Machine utilization for both Z35 and Y21 = (Total machine time for both
Z35 orders and Y21 orders/Machine capacity) * 100 Machine utilization for both Z35 and Y21 = (7,200/8,000)*100 = 90%

04 Calculate average waiting time for Z35 and Y21 if Sandstone introduces Y21.
(a) Average waiting time for Z35 = (Machine utilization² / (2*(1-Machine utilization))) * Machine time per order Average waiting time for Z35 = (0.9² / (2 * (1 - 0.9))) * 100 = 405 hours Average
waiting time for Y21 = (Machine utilization² / (2*(1-Machine utilization))) * Machine time per order Average waiting time for Y21 = (0.9² / (2 * (1 - 0.9))) * 40 = 162 hours

05 Calculate average manufacturing cycle time for Z35 and Y21 if Sandstone introduces Y21.
(b) Average manufacturing cycle time per order for Z35 = Average waiting time for Z35 + Machine time per order Average manufacturing cycle time per order for Z35 = 405 + 100 = 505
hours Average manufacturing cycle time per order for Y21 = Average waiting time for Y21 + Machine time per order Average manufacturing cycle time per order for Y21 = 162 + 40 = 202
hours

Short Answer Step-by-step Solution

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan

Math
16 Edition

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