A MAJOR POTENTIOMETER

MANUFACTURER IS CONSIDERING TWO

ALTERNATIVES FOR NEW PRODUCTION

MACHINES WITH CAPACITY TO PRODUCE 20

000 UNITS PER DAY. ONE ALTERNATIVE IS

FOR A HIGH-CAPACITY AUTOMATED

PRODUCTION MACHINE CAPABLE OF

PRODUCING 20 000 UNITS PER DAY WHEN

OPERATED FOR THREE SHIFTS PER DAY. A

QUARTER-TIME EMPLOYEE WOULD BE

ASSIGNED TO MONITOR THE MACHINE

(EMPLOYEE WOULD MONITOR OTHER

MACHINES AT THE SAME TIME). WITH THE

THREE-SHIFT SCHEDULE THIS WOULD BE

EQUIVALENT TO A THREE-QUARTER-TIME

EMPLOYEE.

A SECOND ALTERNATIVE WOULD BE TO

USE TWO MANUALLY OPERATED MACHINES.

EACH CAPABLE OF 10 000 UNITS PER DAY

ASSUMING THREE-SHIFT OPERATION. HERE.

A TOTAL OF SIX EMPLOYEES (2 PER SHIFT, 3

SHIFTS) WOULD BE NEEDED.

IF LABOR COSTS (INCLUDING WAGES,

BENEFITS, ETC.) ARE $40 000 PER

EMPLOYEE PER YEAR, RECOMMEND WHICH

ALTERNATIVE IS BEST USING THE

EQUIVALENT UNIFORM ANNUAL COST METHOD