Question

Sample observations of a claims processor made over a 160-hour work month reveal that the worker produced a total of 384 completed claims forms. The performance rating was 80%. The worker was idle 20% of the time (so that idle time should be subtracted from the total time when computing the average observed time). The allowance factor is 8%. What is the standard time per unit? Select one: a. 20.0 minutes b. 21.7 minutes c. 0.42 minutes d. 16.0 minutes e. 17.4 minutes

Answer 1

d. 16.0 minutes

Step-by-step explanation:

Performance rating = (1+ Allowance factor)

Observed time = 160/384 (1-idletime) = 0.41667* (1-0.2) hrs per unit

standard time = Observed time * Performance rating

=0.3333 hrs/ unit

= 0.3333*(0.8)

= 0.26668 hrs per unit

= 0.26668*60 min/unit

= 16 min per unit

Therefore, the standard time is 16 min per unit