What is the annual saving over the other design

Assignment Help Microeconomics

Reference no: EM131505422

Question: Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are sold for $0.70 each. Either design will serve equally well and will involve the same material and manufacturing cost except for the lathe and drill operations. Design A will require 12 hours of lathe time and 5 hours of drill time per 1,000 units. Design B will require 7 hours of lathe time and 8 hours of drill time per 1,000 units. The variable operating cost of the lathe, including labor, is $18.60 per hour. The variable operating cost of the drill, including labor, is $16.90 per hour. Finally, there is a sunk cost of $5,000 for Design A and $9,000 for Design B due to obsolete tooling.

a. Which design should be adopted if 125,000 units are sold each year?

b. What is the annual saving over the other design?

Reference no: EM131505422

Questions Cloud

Is the dealerships offer a good deal : An automobile dealership offers to fill the four tires of your new car with 100% nitrogen for a cost of $20. The dealership claims that nitrogen-filled tires.

What is the difference in unit costs : In the design of an automobile radiator, an engineer has a choice of using either a brass- copper alloy casting or a plastic molding.

Explain and define the specific topics that you selected : Explain and define the specific topics that you selected. What advice would you give to parents

Explain the relationships between motivation and emotion : Explain the relationships between motivation, emotion, and behavior. How does emotion affect motivation

What is the annual saving over the other design : Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are sold for $0.70 each.

What is the name of the support group : What is the name of the support group? What types of interaction takes place, peer-to-peer and participant-tofacilitator

Explain the differene between free will and determinism : Explain the differene between free will and determinism. How is the notion of casuality related to these concepts?

Find the process that maximizes profit per day : A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing, and the parameters of each process are as follows.

Determine the vibrational force constant : Determine the vibrational force constant for this HCl molecule. The atomic mass of 1H is 1.0078 amu, and the atomic mass of 35Cl is 34.969 amu.

User Account

All Pages