Question

Simon, Inc., has five fitters, each of whom can assemble 2,000 machines in a year. Each fitter is paid $24,000 per year. Calculate the activity rate per assembly.

a. $18 per machine
b. $12 per machine
c. $10 per machine
d. $15 per machine

Answer 1

The activity rate per assembly is $12 per machine.

Step-by-step explanation:

The activity rate per assembly can be calculated by dividing the total cost of labor by the total number of machines assembled.

Each fitter can assemble 2,000 machines in a year. There are 5 fitters, so the total number of machines assembled is 5 x 2,000 = 10,000 machines.

The labor cost per year for the 5 fitters is 5 x $24,000 = $120,000.

To calculate the activity rate per assembly, divide the total cost of labor ($120,000) by the total number of machines assembled (10,000): $120,000 / 10,000 = $12 per machine.