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Palm Pals Inc. manufactures toy stuffed animals. The direct labor time required to cut, sew, and...

Palm Pals Inc. manufactures toy stuffed animals. The direct labor time required to cut, sew, and stuff a toy is 12 minutes per unit. The company makes two types of stuffed toys—a lion and a bear. The lion is assembled in lot sizes of 40 units per batch, while the bear is assembled in lot sizes of 5 units per batch. Since each product has direct labor time of 12 minutes per unit, management has determined that the lead time for each product is 12 minutes. The lead time for each lion stuffed animal is: a. 12 minutes. b. 480 minutes. c. 48 minutes. d. 60 minutes. e. 468 minutes

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Answer #1

Lead Time: In batch wise processing, time taken by per batch is known as lead time instead of time taken by each unit.

In the given question direct labor time required to cut, sew and stuff a toy is 12 minutes per unit.

The lion is assembled in lot size of 40 units per batch.

In this batch process, lead time count from material reaches the production department and when it comes back as completed output.

So the time taken in processing a batch = 12 minutes * 40 units = 480 minutes.

b. is the answer.

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