Question
2. Enough Company is capable of turning out 15 completed units every 30 seconds. The plant normally operates for 5 days a week on a
2. Enough Company is capable of turning out 15 completed units every 30 seconds. The plant normally operates for 5 days a week on a two 8-hour shift. Each year, the factory is closed 12 working days for holidays. Machinery is idle 750 hours for cleaning, oiling, and maintenance. Normal sales averages 110,000 units a year over a 5-year period. The expected sales volume for the year is 112,500 units. The fixed cost of operating the plant is 385,000 per year. How much is the idle capacity cost under normal capacity if the plant operated at 3,400 hours?
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