Question

A painting operation is performed by a production worker at a labor cost of $1.40 per unit. A robot spray-painting machine, costing $15,000, would reduce the labor cost to $0.20 per unit. If the device would be valueless at the end of 3 years, what is the minimum number of units that would have to be painted each year to justify the purchase of the robot machine

Answer 1

4,167 units

Step-by-step explanation:

The computation of the minimum number of units that should be painted is as follows;

Let us assume the number of units in 3 years be x

So the labor cost without the machine is 1.4x

And, the Labor cost with the machine is 0.2x + $15000

Now the equation is

1.4x = 0.2 x + $15,000

x = $12500

Now

For Each year, it is

= $12,500 ÷ 3

= 4,167 units