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N Co produces a single product, the N98, which passes through three different processes, sawing, hammering and drilling. The throughput per hour of the three processes is 178 units, 156 units and 139 units of N98 respectively. The organisation operates for seven hours a day, six days a week for 52 weeks of the year. The N98 can be sold for $32 per unit and it has a material cost of $12 per unit. Annual conversion costs are budgeted at $1,600,000. How much could N Co spend on improving the throughput of the current bottleneck process if it wished to recover its costs in one year? A. $1,188,096. B. None of the above. C. $14,280. D. $1,703,520. |