A heavy equipment manufacturing company has produced its first unit using 3500 hours and $300,000 overhead cost. The next unit, i.e. the second unit took 3300 hours. Overhead cost for this unit was $200,000. Suppose the labor was $20 per hour. Being the production manager, you need to decide what would be the total production costs for additional 10 units after the completion of the second unit. Round the final amount to nearest integer. (A) $1,597,832 (B) $594,650 (C) $1,003,183 (D) None of the above

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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A heavy equipment manufacturing company has produced its first unit using 3500 hours and
$300,000 overhead cost. The next unit, i.e. the second unit took 3300 hours. Overhead cost for this
unit was $200,000. Suppose the labor was $20 per hour. Being the production manager, you need
to decide what would be the total production costs for additional 10 units after the completion of
the second unit. Round the final amount to nearest integer.
(A) $1,597,832
(B) $594,650
(C) $1,003,183
(D) None of the above
Transcribed Image Text:A heavy equipment manufacturing company has produced its first unit using 3500 hours and $300,000 overhead cost. The next unit, i.e. the second unit took 3300 hours. Overhead cost for this unit was $200,000. Suppose the labor was $20 per hour. Being the production manager, you need to decide what would be the total production costs for additional 10 units after the completion of the second unit. Round the final amount to nearest integer. (A) $1,597,832 (B) $594,650 (C) $1,003,183 (D) None of the above
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