Using the original design,a machine requires 24 hours of setup time.By redesigning the machine,the setup time is reduced by 35%.The cost per setup hour is $250.What is the reduction in non-value-added cost per setup?
A)$87.50 per setup
B)$2,000.00 per setup
C)$3,900.00 per setup
D)$6,000.00 per setup

Question

Quizplus · Accepted Answer

The reduction in setup time is 35% of 24 hours, which equals 8.4 hours. The cost per setup hour is $250, so the reduction in cost per setup is 8.4 hours * $250/hour = $2,100. The correct calculation for the reduction in non-value-added cost per setup is 35% of 24 hours = 8.4 hours, and 8.4 hours * $250/hour = $2,100, not $3,900. My previous response contained an error in the final calculation.

Using the Original Design,a Machine Requires 24 Hours of Setup