Question

Speedy Dress Manufacturing has two workstations, cutting and finishing. The cutting station is limited by the speed of operating the cutting machine. Finishing is limited by the speed of the workers. Finishing normally waits for work from cutting. Each department works an eight-hour day. If cutting begins work two hours earlier than finishing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but also it increases finished units produced each day by 160 units. All units produced can be sold even though the change increases inventory stock by 20% from 400 units. The cost of operating the cutting department two more hours each day is $1,600. The contribution margin of the finished products is $6 each. Inventory carrying costs are $0.40 per unit per day.

What is the changed or average in the daily contribution margin, if speedy manufacturing company continues to be the only worker?

What is the total production per day if the change is made?

Define and give an example of each four cost categories in cost of quality program. Alex, the manager of Speedy Dress Manufacturing Company plans to add doors to its product line and anticipates that they will average 3 doors per day. Each door takes 10 minutes to install.

Answer 1