What is minimum number of workers the company should hire

Assignment Help Microeconomics

Reference no: EM131162690

A machine tool manufacturer is planning an expansion program. Up to 10 workers can be hired and assigned to the five divisions of the company. Since the manufacturer is currently operating with idle machine capacity, no new equipment has to be purchased. Hiring new workers adds $250/day to the indirect costs of the company. On the other hand, new workers add value to the company's output (i.e., sales revenues in excess of direct costs) as indicated in Table. Note that the value added depends upon both the number of workers hired and the division to which they are assigned.

Table: Value added by new workers
New worker (x_n)	Increase in contribution to overhead ($/day)
New worker (x_n)	Division 1	Division 2	Division 3	Division 4	Division 5
0	0	0	0	0	0
1	30	25	35	32	28
2	55	50	65	60	53
3	78	72	90	88	73
4	97	90	110	113	91
5	115	108	120	133	109
6	131	124	123	146	127
7	144	133	135	153	145
8	154	140	140	158	160
9	160	150	144	161	170
10	163	154	145	162	172

The company wishes to hire workers so that the value that they add exceeds the $250/day in indirect costs. What is the minimum number of workers the company should hire and how should they be allocated among the five divisions?

Reference no: EM131162690

Questions Cloud

Determine the cost allocation rate for each activity : Columbus Co. has determined the following activity cost pools and cost driver levels for the year: Determine the cost allocation rate for each activity

Example of a cultural symbol that different cultural groups : Give at least one example of a cultural symbol that different cultural groups may interpret differently. How might an understanding of culture, values of U.S. culture, norms, and technology contribute to a better understanding of the meanings of c..

Identify the mean and the standard deviation : Calculate the mean duration time for each activity. - Calculate the variance for each activity time. - Identify the mean and the standard deviation for each path.

Calculate the profitability index for project : You have a project with the following cash flow stream (assume a 10% discount rate). What is the profitability index of the project? Is it acceptable? Calculate the profitability index for this project

What is minimum number of workers the company should hire : The company wishes to hire workers so that the value that they add exceeds the $250/day in indirect costs. What is the minimum number of workers the company should hire and how should they be allocated among the five divisions?

Several spouses in his or her lifetime : What is it called when When a person has several spouses in his or her lifetime, but only one spouse at a time.

What are set of people related by blood : What are set of people related by blood, marriage or other agreed-upon relationship, or adoption, who share primary responsibility for reproduction and caring for members of society?

Calculate the variance for each activity time : Calculate the mean duration for each activity. - Calculate the variance for each activity time. - Identify the mean and standard deviation for each path.

Difficult financial and economic episodes : The global recession that began in December 2007 has been described as, "one of the most difficult financial and economic episodes in modern history" by U.S. Federal Reserve Chairman Ben Bernake. Millions of people around the globe have either los..

User Account

All Pages