At the beginning of the current year,Peters Company installed a JIT purchasing and manufacturing system.The following information has been gathered about one of the company's products: $$\begin{array} { l r }
\text { Theoretical anual capacity } & 2,000 \
\text { Actual production } & 1,800 \
\text { Production hours avalable } & 500 \
\text { Actual conversion cost per hour } & \$ 7
\end{array}$$
- What is the theoretical velocity per hour?
A)1.0 units
B)1.1 units
C)3.6 units
D)4.0 units

Question

At the beginning of the current year,Peters Company installed a JIT purchasing and manufacturing system.The following information has been gathered about one of the company's products: $$\begin{array} { l r } 
\text { Theoretical anual capacity } & 2,000 \
\text { Actual production } & 1,800 \
\text { Production hours avalable } & 500 \
\text { Actual conversion cost per hour } & \$ 7
\end{array}$$
- What is the theoretical velocity per hour?
A)1.0 units
B)1.1 units
C)3.6 units
D)4.0 units

Quizplus · Accepted Answer

The theoretical velocity per hour is calculated by dividing the theoretical annual capacity by the production hours available. Thus, $ \frac{2000}{500} = 4.0 $ units per hour.

At the Beginning of the Current Year,Peters Company Installed a JIT