In manufacturing a kerosene stove, it is necessary to make two half-inch holes in No.22 gage metal. If these are drilled with the help of a jig, each hole will require one minute. The jig will cost P40.00. The drill press operator receives P1.10 per hour. The holes could be made also on a punch press at the rate of 2 holes each 10 seconds. A die would be required at a cost of P80.00. The punch operator will receive P0.90 per hour. If 1,000 stoves are to be produced and the jig or die will have no scrap value, which method will you recommend?
In manufacturing a kerosene stove, it is necessary to make two half-inch holes in No.22 gage metal. If these are drilled with the help of a jig, each hole will require one minute. The jig will cost P40.00. The drill press operator receives P1.10 per hour. The holes could be made also on a punch press at the rate of 2 holes each 10 seconds. A die would be required at a cost of P80.00. The punch operator will receive P0.90 per hour. If 1,000 stoves are to be produced and the jig or die will have no scrap value, which method will you recommend?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 1.1CE
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- In manufacturing a kerosene stove, it is necessary to make two half-inch holes in No.22 gage metal. If these are drilled with the help of a jig, each hole will require one minute. The jig will cost P40.00. The drill press operator receives P1.10 per hour.
The holes could be made also on a punch press at the rate of 2 holes each 10 seconds. A die would be required at a cost of P80.00. The punch operator will receive P0.90 per hour.
If 1,000 stoves are to be produced and the jig or die will have no scrap value, which method will you recommend?
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