Johnny Now, Inc. produces two different models of outhouses. Demand next period is expected to be 12,000 and 18,000 units for Models A and B, respectively. Model A has CPOPF planning factors of 0.75 and 0.60 for direct labor and machine time, respectively. Model B has CPOPF planning factors of 0.50 and 0.80 for direct labor and machine time, respectively. Historically department G uses 24% of the direct labor and machine time for these products, while department H uses the remaining 76%. What is the direct labor time requirement for department G next period?
A) 4,320 hours
B) 13,680 hours
C) 18,000 hours
D) 9,000 hours
E) 5,184 hours

Question

Quizplus · Accepted Answer

The total direct labor time is calculated as follows: Model A requires 12,000 units * 0.75 hours/unit = 9,000 hours. Model B requires 18,000 units * 0.50 hours/unit = 9,000 hours. Total direct labor time is 9,000 + 9,000 = 18,000 hours. Department G uses 24% of this time, so 18,000 * 0.24 = 4,320 hours.