Machines A and Machine B for producing a batch of old, and requires lots of manu

Question

Machines A and Machine B for producing a batch of old, and requires lots of manual labor to run. You can make new, and it requires less manual labor to run. You can make 230 (B) You are deciding between 25,000 parts, ou can run both machines for 18 hours per day Machine A is very only 100 parts per hour, your la cost for Machine A is $1,250 per day Machine A is s1,2rvariable labor cost is $8.50 per part, and your fixed Machine B is parts per hour, your variable labor cost is $7.25 per part, and your fixed cost for Machine B is $4,500 per day How long will each machine take to finish making all of the parts? How much will each machine cost to make all of the parts? Note: base t calcula tion on making the required number of parts, regardless of how long this takes. Answer Box:

Explanation / Answer

Lets Analyse Machine A

We need to produce 25000 parts using machine A , number of hours per day is 18

We can make 100 parts per hour that is 100*18=1800 parts per day

Variable Cost=$8.50*1800 per day=$15300 per day

Fixed Cost=1250 per day

As we have to acheive the target of 25000 parts then it can be achieved in 25000/1800=250/18=13.88 days

Now for Machine B we have,

Lets Analyse Machine B

We need to produce 25000 parts using machine B , number of hours per day is 18

We can make 230 parts per hour that is 230*18=4140 parts per day

Variable Cost=$7.25*1800 per day=$13050 per day

Fixed Cost=$4500 per day

As we have to acheive the target of 25000 parts then it can be achieved in 25000/4140=6.036 days

Cost for Machine A=(Fixed Cost+Variable Cost)*Number of days=(15300+1250)*13.88=$229,714

Cost for Machine B=(Fixed Cost+Variable Cost)*No of Days=(13050+4500)*6.04=$106,002

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