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Which of the following represents the correct formula for calculating cycle time for a manufacturer?


A) Process time + inspection time - move time - wait time.
B) Process time - inspection time + move time + wait time.
C) Process time + inspection time + move time + wait time.
D) Process time - inspection time - move time - wait time.
E) Process time + inspection time + move time - wait time.

F) A) and D)
G) All of the above

Correct Answer

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Division X makes a part that it sells to customers outside of the company.Data concerning this part appear below: Division X makes a part that it sells to customers outside of the company.Data concerning this part appear below: Division Y of the same company would like to use the part manufactured by Division X in one of its products.Division Y currently purchases a similar part made by an outside company for $49 per unit and would substitute the part made by Division X.Division Y requires 5,000 units of the part each period.Division X has ample excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into outside sales.According to the formula in the text,what is the lowest acceptable transfer price from the standpoint of the selling division? A) $50 B) $49 C) $46 D) $30 E) $20 Division Y of the same company would like to use the part manufactured by Division X in one of its products.Division Y currently purchases a similar part made by an outside company for $49 per unit and would substitute the part made by Division X.Division Y requires 5,000 units of the part each period.Division X has ample excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into outside sales.According to the formula in the text,what is the lowest acceptable transfer price from the standpoint of the selling division?


A) $50
B) $49
C) $46
D) $30
E) $20

F) B) and C)
G) A) and E)

Correct Answer

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