A motorbike part manufacturer produces side mirros. two methods are possible for manufacturing and the parameters of each method are as shown below:

All defect-free parts can be considered sold. rejected parts cannot be sold. find the method that maximizes profit per day if each part is made from $500 worth of material and labor and can be sold for $1000 each. variable overhead cost is charged at the rate of $1500 per hour

Production Rate Daily Production Time Percent of Parts Rejected Method 1 Method 2 40 parts per hour 20 parts per hour 5 hours per day 8 hours per day 15% 10%