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The Goodparts Company produces a component that is subsequently used in the aerospace industry. The component consists of three parts ( A , B ,
The Goodparts Company produces a component that is subsequently used in the aerospace industry. The component consists of three parts A B and C that are purchased from outside and cost and cents per piece, respectively. Parts A and B are assembled first on assembly line which produces components per hour. Part C undergoes a drilling operation before being finally assembled with the output from assembly line There are, in total, six drilling machines, but at present only three of them are operational. Each drilling machine drills part C at a rate of parts per hour. In the final assembly, the output from assembly line is assembled with the drilled part C The final assembly line produces at a rate of components per hour. At present, components are produced eight hours a day and five days a week. Management believes that if the need arises, it can add a second shift of eight hours for the assembly lines.
The cost of assembly labor is cents per part for each assembly line; the cost of drilling labor is cents per part. For drilling, the cost of electricity is cents per part. The total overhead cost has been calculated as $ per week. The depreciation cost for equipment has been calculated as $ per week.
a Determine the process capacity number of components produced per week of the entire process.
b Suppose a second shift of eight hours is run for assembly line and the same is done for the final assembly line. In addition, four of the six drilling machines are made operational. The drilling machines, however, operate for just eight hours a day. What is the new process capacity number of components produced per week
b Which of the three operations limits the capacity?
Drilling machines
Assembly line
Final assembly line
c Management decides to run a second shift of eight hours for assembly line plus a second shift of only four hours for the final assembly line. Five of the six drilling machines operate for eight hours a day. What is the new capacity?
c Which of the three operations limits the capacity?
Final assembly line
Drilling machines
Assembly line
d Determine the cost per unit output for part b
Note: Round your answer to decimal places.
d Determine the cost per unit output for part c
Note: Round your answer to decimal places.
e The product is sold at $ per unit. Assume that the cost of a drilling machine fixed cost is $ and the company produces units per week. Assume that four drilling machines are used for production. If the company had an option to buy the same part at $ per unit, what would be the breakeven number of units?
Note: In your calculations, use the twodigit cost per unit from part d Round your answer to the nearest whole number.
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