Question

If you want to add 500,000 units of capacity to an assembly line with an automation rating of 5, how much will it cost? (Hint: $6 for floor space and $4 times automation level.

Answer 1

To add 500,000 units of capacity to an assembly line with an automation rating of 5, the cost is calculated by combining both the floor space cost and the cost based on the automation level, resulting in a total cost of $13,000,000.

Step-by-step explanation:

If you want to add 500,000 units of capacity to an assembly line with an automation rating of 5, the cost is calculated by summing the cost of floor space with the product of the automation level and its associated cost.

The cost for floor space is $6 per unit, resulting in a total floor space cost of:

• 500,000 units × $6/unit = $3,000,000

The cost associated with the automation level is $4 times the automation level, which in this case is:

• 500,000 units × (5 × $4/unit) = $10,000,000

Adding the two amounts gives us the total cost of:

• $3,000,000 + $10,000,000 = $13,000,000

Hence, the total cost to add 500,000 units of capacity with an automation rating of 5 is $13,000,000.