Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 11 - Performance Measurement in Decentralized Organizations - Questions - Page 497: 11-8

Answer

An manufacturing cycle efficiency (MCE) of less than 1 means that the production process includes non-value-added time.The MCE of 0.40 (40%) means that 60% of the time a unit is in process is spent on activities that do not add value to the product.

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