manufacturing a kerosene stove, it is necessary to make two half-inch holes in the 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
manufacturing a kerosene stove, it is necessary to make two half-inch holes in the 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
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 the 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 for 5seconds. 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 & the jig/die will have no scrap value, which method will you recommend on the bases of cost and on completion of work?
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