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What is the expected conversion cost per unit

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Question - Cycle Time and Velocity, MCE

Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce 117,500 laptops per quarter but currently produces 35,250 units. The conversion cost per quarter is $3,525,000. There are 58,750 production hours available within the plant per quarter. In addition to the processing minutes per unit used, the production of the laptops uses 30 minutes of move time, 15 minutes of wait time, and 15 minutes of rework time. (All work is done by cell workers.)

Assume that the company identifies poor plant layout as the root cause of wait time and move time.

Required: Assume that you set an MCE target of 65 percent, based on the improvement strategy described in Requirement 1. What is the expected conversion cost per unit?

Reference no: EM132052547

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