An industrial engineer has designed two alternative methods of accomplishing a production job. Both methods involve the acquisition of the same working place and other capital equipment to be used for this job only. Method A calls for a crew consisting of three men each costing P30000 per hour. This method will result in the production of 10 units per hour of which two will be rejects.

Method B calls for a crew of two men each costing P35.00 per hour and should result in the production of eight units per hour of which one will be reject.

The cost of the direct material lost in each reject is P20.00. If a certain total number of units is to be produced, find which method is more economical.

Select one:

a.Therefore method A is more economical than method B.

b.Therefore method A is as economical as method B.

c.Therefore method A is more economical than method B.

d.No Answer