Question
I need help C and D The labor cost to produce a certain item is $21.00 per hour. Job setup costs $500 and material costs
I need help C and D
The labor cost to produce a certain item is $21.00 per hour. Job setup costs $500 and material costs are $30 per unit. The item can be purchased for $200.00 per unit. The learning rate is 80 percent. Overhead is charged at a rate of 25 percent of labor, materials, and setup costs.
a. Determine the total production cost if 25 units need to be produced, given that the first unit took 8 hours to complete.
b. What is the minimum production quantity (n) necessary to make production cost less than purchase cost?
Labor Cost Per Hour | $ 21.00 | |||
Learning Curve | 60% | |||
Set up cost | $ 500.00 | |||
Time for the first unit | 8 | |||
Material Cost | $ 30.00 | |||
Overhead | 25% | |||
Purhase cost | $ 200.00 | |||
A | 25 | B | 15 | |
Material Cost | $ 750.00 | Material Cost | $ 450.00 | |
Labor Cost | $ 2,067.91 | Labor Cost | $ 1,429.77 | |
Set up Cost | $ 500.00 | Set up Cost | $ 500.00 | |
Overhead Cost | $ 829.48 | Overhead Cost | $ 594.94 | |
Total Cost | $ 4,147.39 | Total Cost | $ 2,974.71 | |
Per Unit Cost | $ 165.90 | Per Unit Cost | $ 198.31 | |
Difference | $ 1.69 |
c. Create a graph plotting the following data series plotted against varying levels of Q
Setup Cost | ||||
Total Variable Cost | ||||
Total Labor Cost | ||||
Total Overhead Cost | ||||
Total Materials Cost | ||||
Total Cost (setup+variable+labor+material+overhead) |
d. Create a graph plotting the following data series plotted against varying levels of Q
Average Production Cost | |
Average Purchase Cost |
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