Cycle Time and Velocity, MCE Computador has a manufacturing plant in Des Moines

Question

Cycle Time and Velocity, MCE

Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce 243,000 laptops per quarter but currently produces 91,125 units. The conversion cost per quarter is $7,290,000. There are 60,750 production hours available within the plant per quarter. In addition to the processing minutes per unit used, the production of the laptops uses 10 minutes of move time, 20 minutes of wait time, and 5 minutes of rework time. (All work is done by cell workers.)

1. Compute the theoretical and actual velocities (per hour) and the theoretical and actual cycle times (minutes per unit produced). If required, round to one decimal place.

2. Compute the ideal and actual amounts of conversion cost assigned per laptop.

3. Calculate MCE. If required, round your answer to two decimal places.

I need help with number 3 and it is not .53

Theoretical Actual Velocity 4 laptops per hour 1.5 laptops per hour Cycle time 15 minutes per laptop 40 minutes per laptop

Explanation / Answer

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Processing Time=Theoritcal Cycle Time 15 Minutes Non Processing Time=Actual Cycle time-Theoritcal Cycle Time 40-15=25 Minutes MCE=Processing Time/(Processing Time+Non Processing Time) MCE= 15/(15+25) 37.5% or 0.375

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