5. A manufacturer has been shipping his product (moderately heavy machines), mounted only on skids without complete crating. To avoid crating he must ship in freight cars which contain only his machines. To do this he must pay freight on a car capacity load of 42 tons regardless of whether or not the car is completely full. In the past he actually has shipped only 30 tons in each car. The car load freight rate is P4.10 per hundred pounds. If the machines are crated so that they can be shipped in mixed car lots, along with other merchandise,

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

5

5. A manufacturer has been shipping his product (moderately heavy
machines), mounted only on skids without complete crating. To avoid
crating he must ship in freight cars which contain only his machines.
To do this he must pay freight on a car capacity load of 42 tons
regardless of whether or not the car is 'completely full. In the past
he actually has shipped only 30 tons in each car. The car load freight
rate is P4. 10 per hundred pounds. If the machines are crated so that
they can be shipped in mixed car lots, along with other merchandise,
they can be shipped at a rate of P4.20 per hundred pounds with the
freight bill computed only on the actual weight shipped. The cost of
crating would be P25.00 per machine and would increase the shipping
weight from 1,200 to 1,220 pounds per machine.
Which procedure should be followed? (1 ton = 2,200 lbs.)
Ans. Shipping without crating is cheaper by P404.80
Transcribed Image Text:5. A manufacturer has been shipping his product (moderately heavy machines), mounted only on skids without complete crating. To avoid crating he must ship in freight cars which contain only his machines. To do this he must pay freight on a car capacity load of 42 tons regardless of whether or not the car is 'completely full. In the past he actually has shipped only 30 tons in each car. The car load freight rate is P4. 10 per hundred pounds. If the machines are crated so that they can be shipped in mixed car lots, along with other merchandise, they can be shipped at a rate of P4.20 per hundred pounds with the freight bill computed only on the actual weight shipped. The cost of crating would be P25.00 per machine and would increase the shipping weight from 1,200 to 1,220 pounds per machine. Which procedure should be followed? (1 ton = 2,200 lbs.) Ans. Shipping without crating is cheaper by P404.80
Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Signaling
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education