C&A Toys uses two steps to make a toy. Step 1 takes 20 seconds. Step 2 takes 15 seconds. Each step is staffed by one worker, for a total of two workers. Assume wages are a fixed cost. Each toy is sold for $20. Material costs are $5 per toy and fixed costs are $500 per hour. Demand rate is 120 toys per hour including the cost of labor. How much profit does C&A Toys make per hour?
C&A Toys uses two steps to make a toy. Step 1 takes 20 seconds. Step 2 takes 15 seconds. Each step is staffed by one worker, for a total of two workers. Assume wages are a fixed cost. Each toy is sold for $20. Material costs are $5 per toy and fixed costs are $500 per hour. Demand rate is 120 toys per hour including the cost of labor. How much profit does C&A Toys make per hour?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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C&A Toys uses two steps to make a toy. Step 1 takes 20 seconds. Step 2 takes 15 seconds. Each step is staffed by one worker, for a total of two workers. Assume wages are a fixed cost. Each toy is sold for $20. Material costs are $5 per toy and fixed costs are $500 per hour. Demand rate is 120 toys per hour including the cost of labor. How much profit does C&A Toys make per hour?
A. $3100
B. $2200
C. $1900
D. $1300
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