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Prior to installing a JT gystem, Grindstone Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 9-inch insulation.
Prior to installing a JT gystem, Grindstone Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 9-inch insulation. The maintenance costs totaled $432,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: 4-inch 6-inch 9-inch After installing JT, three manufacturing cells were created, and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $432,000; however, these costs are now traceable to each cell. Cell, 4 -inch $125,000 Cell, 6-inch 175,000 Cell, 9-inch 165,000 The maintenance cost per roll of 9 inch insulation before JT is installed would be
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