Acme Metal produces gear shafts. Currently, the gear shafts are produced in batches of twenty. Materials necessary to produce one batch of twenty are brought to the cutting department, where they sit for an average of 10 minutes before cutting takes place. It takes eight minutes to cut the materials for each unit. Once the entire batch is cut, it is moved to the welding department. After a ten-minute wait, a computerized welding machine is setup to weld the parts in the batch. The 10-minute wait time includes travel time from cutting and is in addition to the time required to setup the welder. After the entire batch of 20 is welded, it is moved to the grinding department. Due to the backlog in grinding, it takes an average of 10 hours (plus the 10 minute travel time between departments) before work begins on the batch in the grinding department. After grinding is completed, the batch moves to buffing and packing. When the entire batch is completed the parts are shipped to the customer or moved to the finished goods warehouse. At any one time there is usually one batch being worked on in each department, one batch waiting at the welding department and two batches waiting at the grinding department.

A) What is the lead-time (throughput time) for Acme Metal to produce a batch of 20 gear shafts?

B) How many gear shafts can Acme Metal produce per hour?

C) How many gear shafts on average are in work in process?

D) The direct material cost averages $75 for each gear shaft. Assume that direct labor time equals the process time for each process (e.g., the direct labor time for welding is 6 minutes per unit). If Acme Metal has a standard direct labor rate of $20 per hour, and they assign overhead at a standard rate of $180 per direct labor hour, what is the standard cost for each gear shaft?
 

20 per Batch 10 minute wait CUT 8 minutes each BUFF & PACK 10 minutes each 10 minute wait 10 minute wait WELD GRIND 15 minutes each 6 minutes each, 20 minute setup for batch 610 minute wait