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HELP 1 parts but through redesign has reduced the number of parts y and 18. (15 points) Hillary Corp. to s.erhly produces a produet wsin
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1 parts but through redesign has reduced the number of parts y and 18. (15 points) Hillary Corp. to s.erhly produces a produet wsin manufacturer of equipment used in automobile production. It urrent activity capacit demand for the 15 part configuration and expected activity demand for the 5 part configuration are provided below Activities Activity Activity Expected Current Activity Demand DriverCapacity Activity Demand Matcrials number 300,000 of parts 100,000 300,000 Assembly direct 10,000 4,000 10,000 labor hours Purchasing number 10,000 8,000 6,000 parts of orders Materials usage has a rate of $4 per part and no fixed costs. Assembly has a rate of $15 per labor hour with no fixed component. Purchasing requires clerks that can process 5000 purchase orders. Each clerk earns $35,000 per year. There is also a $2 per order processing cost. The product sells for $45 and 50,000 units will be produced. (Please label your answers with the corresponding letter) a. What is the total cost savings from the new design? b. What is the new sales price if the cost savings are passed on to the customerStep by Step Solution
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