Motorsports, Inc. builds two different types of motors. Model A has averaged 20,000 units annually, and Model B has average 30,000 units annually. The firm has historically used 80,000 direct labor hours and 10,000 hours of machine time per year to build Model A. Also, 150,000 annual direct labor hours have been allocated to Model B, along with 60,000 hours of annual machine time. What is the CPOPF planning factor for direct labor for Model B?
A) 0.20
B) 4.00
C) 7.00
D) 5.00
E) 4.60

Question

Quizplus · Accepted Answer

CPOPF planning factor for direct labor for Model B can be calculated by dividing the allocated direct labor hours by the expected annual production of Model B.

CPOPF planning factor for direct labor for Model B = (Allocated direct labor hours for Model B) / (Expected annual production of Model B)

CPOPF planning factor for direct labor for Model B = 150,000 / 30,000

CPOPF planning factor for direct labor for Model B = 5

Therefore, the CPOPF planning factor for direct labor for Model B is 5. The closest answer option is D (5.00).