Cycle Time and Velocity, MCE
Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce 655,000 laptops per quarter but currently produces 229,250 units. The conversion cost per quarter is $19,650,000. There are 65,500 production hours available within the plant per quarter. In addition to the processing minutes per unit used, the production of the laptops uses 15 minutes of move time, 25 minutes of wait time, and 5 minutes of rework time. (All work is done by cell workers.)
Assume that the company identifies poor plant layout as the root cause of wait time and move time.
Required:
Assume that you set an MCE target of 60 percent, based on the improvement strategy described in Requirement 1.
What is the expected conversion cost per unit?
Round your calculations to two decimal places and final answer to the nearest cent.
$ per unit