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Alpha, Inc., manufactures Product A. The setup time for each unit of Product A is 8 hours. Gamma, Inc., that uses the just-in-time system and
Alpha, Inc., manufactures Product A. The setup time for each unit of Product A is 8 hours. Gamma, Inc., that uses the just-in-time system and produces the same product has reduced setup time by 1 hour. Setup labor is $35 per hour. If Alpha wants to reduce non-value-added costs by 30 percent next year, compute the currently attainable standard for setup time. (Round answer to one decimal place.)
a. | 7.3 hours | |
b. | 6.2 hours | |
c. | 4.5 hours | |
d. | 5.9 hours |
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