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A production machine operates in a semi-automatic cycle but a worker must attend the machine 100% of the time to load parts. Unloading is accomplished automatically. The worker's cost rate = 37$/hr including applicable labor overhead rate. To produce the parts, the production machine was bought six years ago for installed price of $750,000. At that time it was anticipated that the machine would last 8 years and be used 5000 hours per year. However, it is now in need of major repairs that will cost $166,500. These repairs will be made and as a result, the machine will last three years, operating 4000 hours per year. Applicable overhead rate for the machine = 42%. Cost of the starting parts = 0.12$/pc. The job runs several months so the effect of setup can be ignored. Each cycle, the actual process time = 26s, and time to load the part = 18 s. Automatic unloading takes 4 s. A proposal has been made to install an automatic parts-loading device on the machine. The device would cost $36,400 and would reduce the part loading time to 5 s each cycle. Its expected life is 4.5 years. The device would also relieve the worker from full-time attention to the machine. Instead, the worker could assist four machines, effectively reducing the labor cost to 25% of its current rate for each machine. However, the new device results in availability of production to go down to 96% with a 2% scrap. The operation runs 250 days per year, 16 hours per day. Determine the cost advantage ($/pc) of producing parts using the new part loading device.

A production machine operates in a semi-automatic cycle but a worker must attend the machine 100% of the time to load parts. Unloading is accomplished automatically. The worker's cost rate = 37$/hr including applicable labor overhead rate. To produce the parts, the production machine was bought six years ago for installed price of $750,000. At that time it was anticipated that the machine would last 8 years and be used 5000 hours per year. However, it is now in need of major repairs that will cost $166,500. These repairs will be made and as a result, the machine will last three years, operating 4000 hours per year. Applicable overhead rate for the machine = 42%. Cost of the starting parts = 0.12$/pc. The job runs several months so the effect of setup can be ignored. Each cycle, the actual process time = 26s, and time to load the part = 18 s. Automatic unloading takes 4 s. A proposal has been made to install an automatic parts-loading device on the machine. The device would cost $36,400 and would reduce the part loading time to 5 s each cycle. Its expected life is 4.5 years. The device would also relieve the worker from full-time attention to the machine. Instead, the worker could assist four machines, effectively reducing the labor cost to 25% of its current rate for each machine. However, the new device results in availability of production to go down to 96% with a 2% scrap. The operation runs 250 days per year, 16 hours per day. Determine the cost advantage ($/pc) of producing parts using the new part loading device.

Elements Of Electromagnetics
Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
ChapterMA: Math Assessment
Section: Chapter Questions
Problem 1.1MA
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the final answer is 0.5 A production machine operates in a semi-automatic cycle but a worker must attend the machine 100% of the time to load parts. Unloading is accomplished automatically. The worker's cost rate = 37$/hr including applicable labor overhead rate. To produce the parts, the production machine was bought six years ago for installed price of $750,000. At that time it was anticipated that the machine would last 8 years and be used 5000 hours per year. However, it is now in need of major repairs that will cost $166,500. These repairs will be made and as a result, the machine will last three years, operating 4000 hours per year. Applicable overhead rate for the machine = 42%. Cost of the starting parts = 0.12$/pc. The job runs several months so the effect of setup can be ignored. Each cycle, the actual process time = 26s, and time to load the part = 18 s. Automatic unloading takes 4 s. A proposal has been made to install an automatic parts-loading device on the machine. The device would cost $36,400 and would reduce the part loading time to 5 s each cycle. Its expected life is 4.5 years. The device would also relieve the worker from full-time attention to the machine. Instead, the worker could assist four machines, effectively reducing the labor cost to 25% of its current rate for each machine. However, the new device results in availability of production to go down to 96% with a 2% scrap. The operation runs 250 days per year, 16 hours per day. Determine the cost advantage ($/pc) of producing parts using the new part loading device.
Transcribed Image Text:the final answer is 0.5 A production machine operates in a semi-automatic cycle but a worker must attend the machine 100% of the time to load parts. Unloading is accomplished automatically. The worker's cost rate = 37$/hr including applicable labor overhead rate. To produce the parts, the production machine was bought six years ago for installed price of $750,000. At that time it was anticipated that the machine would last 8 years and be used 5000 hours per year. However, it is now in need of major repairs that will cost $166,500. These repairs will be made and as a result, the machine will last three years, operating 4000 hours per year. Applicable overhead rate for the machine = 42%. Cost of the starting parts = 0.12$/pc. The job runs several months so the effect of setup can be ignored. Each cycle, the actual process time = 26s, and time to load the part = 18 s. Automatic unloading takes 4 s. A proposal has been made to install an automatic parts-loading device on the machine. The device would cost $36,400 and would reduce the part loading time to 5 s each cycle. Its expected life is 4.5 years. The device would also relieve the worker from full-time attention to the machine. Instead, the worker could assist four machines, effectively reducing the labor cost to 25% of its current rate for each machine. However, the new device results in availability of production to go down to 96% with a 2% scrap. The operation runs 250 days per year, 16 hours per day. Determine the cost advantage ($/pc) of producing parts using the new part loading device.
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