Reference no: EM133657825

Question

The Buckeye Trampoline Shop produces one size of trampolines. Out of the 100 trampolines that begin in production each month, only 75 percent pass inspection and are considered good enough to sell. The other 25 percent are scrapped due to quality problems that are identified after they have completed the production process. Each trampoline sells for $418. Each trampoline only requires 8 hours of labor because much of the process is automated. Every employee works an average of 150 hours per month. Employees are paid at $12 per hour, the materials cost is $60 per trampoline, and overhead cost is $3,500.