Final answer:
To address changes in production costs, a firm must adjust its calculations for each production method as machine and labor costs vary. The firm should then select the most cost-effective method based on these updated costs. Factors such as production time and product quality should also be taken into account in the decision-making process.
Step-by-step explanation:
The initial question regarding the impact of zero engineering applied to Job 56 and a $900 decrease in cost cannot be accurately answered without additional context or information. However, focusing on the provided reference questions, we can determine how changes in the cost of labor and machines affect the total cost of different production methods. Assuming that labor costs remain constant at $40 and the machine cost fluctuates, we can calculate the total costs for each production method as they adjust to changes in machine cost to determine the most cost-effective production method.
If the cost of a machine decreases to $50, the total cost for each production method will decrease accordingly. The firm should choose the method with the lowest total cost, which generally would be the method where machine use is maximized, assuming labor is more expensive or less efficient. Conversely, if the cost of machines increases to $55, the total cost for all methods involving machine use would increase, and the firm may need to consider a more labor-intensive method or a different resource allocation to minimize costs.
In summary, to make an informed decision, the firm should calculate the total cost for each method by incorporating the new machine costs and compare them to decide on the most cost-effective strategy. The decision should also take into account other factors such as production time, product quality, and machine versus labor effectiveness.