Business, 22.07.2020 18:01 shonesam98

Analyze Life Force Fitness, Inc. Life Force Fitness, Inc., assembles and sells treadmills. Activity-based product information for each treadmill is as follows: Activity Activity-Base Usage X Activity Rate = Activity Cost
(hrs. per unit) per Hour
Motor assembly 1.50 $20 $30.00
Final assembly 1.00 18 18.00
Testing 0.25 22 5.50
Rework 0.40 22 8.80
Moving 0.20 15 3.00
Activity cost per unit $65.30
All of the activity costs are related to labor. Management must remove $2.00 of activity cost from the product in order to remain competitive.
Rework involves disassembling and repairing a unit that fails testing. Not all units require rework, but the average is 0.40 hours per unit. Presently, the testing is done on the completed assembly; but much of the rework has been related to motors, which can be tested independently prior to adding the motor to the treadmill during final assembly. Thus, motor issues can be diagnosed and solved without having to dis-assemble the complete treadmill. This change will reduce the average rework per unit by one-quarter. Determine the new activity cost per unit under the rework improvement scenario.

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Analyze Life Force Fitness, Inc. Life Force Fitness, Inc., assembles and sells treadmills. Activity-...

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