Cost saving of this change

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Reference no: EM139347

Q. Pickles at the Sour Pickles Ranch are picked either by labor or by a machine. Labor can be obtained very cheaply - the going rate is $8 per hour, while the cost of using a machine for one hour is $32. The ranch is currently using only labor to pick pickles on an 800 acre farm. On average each worker can pick approximately 4 bushels of pickles per hour, while the additional pickles contributed by a pickle-picking machine are 40 bushels per hour. You have already determined that the machine is more efficient than labor, if SPR decides to take your recommendation and use a machine to pick pickles and eliminate all of its work force (labor), Illustrate what would be the cost saving of this change?

Reference no: EM139347

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