Question
The representative for the company's budgeting committee consults the production manager to set the standards for the upcoming quarter. Allowing for normal work delays, spoilage,
The representative for the company's budgeting committee consults the production manager to set the standards for the upcoming quarter. Allowing for normal work delays, spoilage, waste, employee rest periods, and machine downtime, the average defect rate is 2 out of 10 units per worker per day. In addition, the manager provides the following information: The average daily production is 10 total units per worker. The production department operates for eight hours per day, five days a week. The company assumes 4 work weeks per month. The quarterly budget submitted by the budgeting committee assumes the monthly production target per worker to be 200 acceptable units (without defects). The board of directors disapproved the budget, stating it to be unattainable. Under which of the following situations can the given budget be achieved? A The budget can be achieved if the production department is able to reduce the defect rate to 1 out of 10 units per day. B The budget can be achieved if the production department operates 45 hours in a week. C The budget can be achieved if the production manager allows for normal work delays, spoilage, waste, employee rest periods, and machine downtime. D The budget can be achieved with an ideal production standard provided by the most efficient and skilled workers at their best efficiency all of the time.
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