Question

An assembly line can produce 90 units per hour. The line’s hourly cost (total salaries of workers) is $4,283 an hour (the first 8 hours). Workers are guaranteed a minimum of 6 hours (i.e., they will be paid for 6 hours per day, even if they work less than 6 hours). There is a 50% premium for overtime (i.e., salary is increased 50% during overtime hours), however, productivity for overtime drops by 7% (i.e., the number of units produced per hour drops 7%). What is the total costs if 966 units needs to be produced?

Answer 1

To produce 966 units, the total cost would be $56,133.825. This includes regular hours and overtime hours.

Step-by-step explanation:

To calculate the total cost of producing 966 units, we need to consider the regular hours and the overtime hours.

Regular hours: The assembly line can produce 90 units per hour, so it will take 966/90 = 10.73 hours to produce 966 units. Since workers are guaranteed a minimum of 6 hours, we can assume 6 hours of regular hours.

Overtime hours: The remaining 4.73 hours will be considered as overtime. Overtime salary is increased by 50%, so the hourly cost will be $4,283 * 1.5 = $6,424.5. However, productivity drops by 7%, so the assembly line will produce 90 * 0.93 = 83.7 units per hour of overtime.

Total cost: The total cost of regular hours is $4,283 * 6 = $25,698. The total cost of overtime hours is $6,424.5 * 4.73 = $30,435.825. The total cost of producing 966 units is $25,698 + $30,435.825 = $56,133.825.

Answer 2

Instructions are listed below

Step-by-step explanation:

Giving the following information:

An assembly line can produce 90 units per hour.

The line’s hourly cost (total salaries of workers) is $4,283 an hour (the first 8 hours).

Workers are guaranteed a minimum of 6 hours.

There is a 50% premium for overtime

Productivity for overtime drops by 7%

Units produced in over time= 90*0.93= 83.7

What are the total costs if 966 units need to be produced?

We will calculate the costs in two different scenarios. First, the units will be made in one day. In the second one, units will be made in two days.

One day production:

An 8-hour shift can produce 720 units.

The 246 units remaining will take extra hours.

Units produced in over time= 90*0.93= 83.7

Hours to produce 246 units= 246/83.7= 3hours

Total cost= one 8 hour shift + 3extra hours

Total cost= 4,283 *8+ (4,283 *1.5)*3= $53537.5

Two-day production:

Total cost= one 8 hour shift + 6 hours

Total cost= 4238*8 + 4238*6= $83332