Appliance Company inspects every steam iron it manufactures for safety issues. The standard labour cost is $12 per hour. The maintenance standard at the beginning of the first quarter is 20 minutes per iron. Appliance is implementing a new production process that will aid in reducing any potential electrical defects in the irons. This will decrease the inspection time to 15 minutes per iron. After the end of the first quarter, the new process had reduced the inspection time per iron from 20 minutes to 14 minutes.
Required:
A. Identify the kaizen and maintenance labour standards in place at the beginning of the first quarter. Express the standards in both physical and financial terms.
B. Calculate the expected cost reduction and actual cost reduction on a per unit basis.

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The Answer of Appliance Company inspects every steam iron it manufactures for safety issues. The standard labour cost is $12 per hour. The maintenance standard at the beginning of the first quarter is 20 minutes per iron. Appliance is implementing a new production process that will aid in reducing any potential electrical defects in the irons. This will decrease the inspection time to 15 minutes per iron. After the end of the first quarter, the new process had reduced the inspection time per iron from 20 minutes to 14 minutes.
Required:
A. Identify the kaizen and maintenance labour standards in place at the beginning of the first quarter. Express the standards in both physical and financial terms.
B. Calculate the expected cost reduction and actual cost reduction on a per unit basis.

Appliance Company Inspects Every Steam Iron It Manufactures for Safety