At the beginning of 2018, Haroldson Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products. $$\begin{array} { l r }
\text { Theoretical annual capacity } & 9,000 \
\text { Actual production } & 3,600 \
\text { Production hours available } & 3,000 \
\text { Actual cost per unit } & \$ 33
\end{array}$$ The theoretical velocity per hour is
A)3.0 units.
B)2.8 units.
C)1.5 units.
D)1.55units.

Question

At the beginning of 2018, Haroldson Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products. $$\begin{array} { l r } 
\text { Theoretical annual capacity } & 9,000 \
\text { Actual production } & 3,600 \
\text { Production hours available } & 3,000 \
\text { Actual cost per unit } & \$ 33
\end{array}$$ The theoretical velocity per hour is
A)3.0 units.
B)2.8 units.
C)1.5 units.
D)1.55units.

Quizplus · Accepted Answer

The theoretical velocity per hour is calculated by dividing the theoretical annual capacity by the production hours available. Thus, $ \frac{9,000 \text{ units}}{3,000 \text{ hours}} = 3.0 \text{ units per hour}$.

At the Beginning of 2018, Haroldson Company Installed a JIT