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Connect ? ????https://newconnectmheducation.com/flow/connect.html ? ? ? DRUG STUDIES AME ? CPE Monitor Chapter 10 6 Help Save & Exit Submit Saved Check my 3 Problem 10-18 A production process consists of a three-step operation. The scrap rate is 14 percent for the first step and 10 percent for the other two points steps a.lf the desired daily output is 460 units, how many units must be started to allow for loss due to scrap? (Do not round intermediate calculations. Round up your final answer to the next whole number.) Number of units b.lf the scrap rate for each step could be cut in half at every operation, how many units would this save in terms of the scrap eBook Print References allowance? (Do not round intermediate calculations. Round up your final answer to the next whole number.) Number of units c.lf the scrap represents a cost of $10 per unit, how much is it costing the company per day for the original scrap rate (i.e. the Part a scrap rate)? (Round your final answer to the nearest whole number. Omit the "$" sign in your response.) Cost Mc 3 of 3! Next Type here to search 7:28 AM 6/29/2018

Explanation / Answer

Scrap rate after 1st step = 14%

Scrap rate after 2nd step = 10%

Scrap rate after 3rd step = 10%

If we start with 1000 units,

Units left after 1st step = 1000 * (100% - 14%) = 860

Units left after 2nd step = 860 * (100% - 10%) = 774

Units left after 3rd step = 774 * (100% - 10%) = 696.6

Ans a)

If the desired daily output is 460 units,the number of units that we must start to allow for loss due to scrap = 460 x (1000 / 696.6)

= 660 units

Ans b)

If the scrap % was reduced by half for each step, then if we start with 1000 units at the start,

Units left after 1st step = 1000 * (100% - 7%) = 930

Units left after 2nd step = 930 * (100% - 5%) = 883.5

Units left after 3rd step = 883.5 * (100% - 5%) = 839.32

If the desired daily output is 460 units,the number of units that we must start to allow for loss due to scrap = 460 x (1000 / 839.32)

= 548 units

Hence the scrap allowance is 660 - 548 = 112 units

Ans c)

Number of scrap units at original scrap rate percentage = Total Number of units started with - Total number of units left after scrap

= 660 - 460 = 200 units

Cost per scrap unit = $10

Total scrap cost = 200 * 10 = $2000

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