the first operation cost 28 per unit. after the first operation the cases are in
ID: 443541 • Letter: T
Question
the first operation cost 28 per unit. after the first operation the cases are inspected. typically we find that 10% of the cases are rejected and discarded or 90% of those units inspected are accepted and are passed on to the second operation. operation 2 cost 20 per unit processed. the units completing operation 2 are inspected at inspection station 2. here 75% of the units are accepted and pass on. The other 25% are reporcessed at a cost of 5 each. after reprocessed units are completed, they are inspected and half of them pass inspection and are passed on, while the other half are discarded.
a. If we start with 1000 cases entering opertion 1, how many of them are still acceptable at the end of operation 2?
b. what is the total cost of producting the number of good units you calculated above?
c. what is the average cost of a good unit?
Explanation / Answer
a. If we start with 1000 cases entering opertion 1, how many of them are still acceptable at the end of operation 2?
Ans:At Operation 1:90% cases are acceptable
900 units are accepted at Operation1 and are passed to Operation 2
At Operation 2 ,75% are accepted
So 675 units are acceptable at Operation 2
b) what is the total cost of producting the number of good units you calculated above?
Ans:Total units =675
Total cost per unit=48
Total cost of producing these units: 32400
c. what is the average cost of a good unit?
Ans:Average cost and or unit cost is equal to total cost divided by the number of goods produced (the output quantity,
Total Cost=28+20+5=53 cost per unit
Total Quantity produced=675+168=843
So Total Cost=53*843=44679
Average Cost=53
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