Question

Samson Manufacturing Company, a calendar year company, purchased a machine for $65,000 on January 1, 20x0. At the date of purchase, Samson incurred the following additional costs

Answer 1

The student's question involves evaluating different manufacturing cost methods after a change in the cost of machines. Calculations must be performed for each method with the updated machine cost, facilitating the decision on the most cost-effective method for production.

Step-by-step explanation:

The question pertains to the assessment of varying manufacturing costs under different wage and machinery expense scenarios. When the cost of machines increases to $55 and the cost of labor remains at $40, the total cost for each method will change accordingly. To determine which method to choose, one must calculate the total cost for each method using the new machine cost and compare them. For instance, the cost of technology 1 with 10 machines would now be 10 × $55 = $550. Comparing the costs of all three technologies will help the firm decide which option is financially the most viable.

Example C indicates a scenario where workers cost $90 and machines cost $80. However, this does not impact the calculation since the new labor and machine costs stipulated are $40 and $55, respectively.