Engineering Economics A manufacturer has a contract to produce 10,000 units of a certain device. The device can be made by highly-trained workmen working individually. The device can also be made by less-skilled workmen working together if they are given specialized equipment and proper supervision. The highly-trained workmen are paid P62.5 per hour, and each can produce one unit every 5 hours on the average. The specialized equipment can be placed in operation at an original cost of P50,000 and it will be worthless at the time all the 10,000 units are manufactured. With this equipment four men, paid P43.75 each per hour, and a foreman, paid P75 per hour, can do the work. All the five men working together can finish one unit in 20 minutes. Determine the gain or loss if the specialized equipment is used
A manufacturer has a contract to produce 10,000 units of a certain device. The device can be made by highly-trained workmen working individually. The device can also be made by less-skilled workmen working together if they are given specialized equipment and proper supervision. The highly-trained workmen are paid P62.5 per hour, and each can produce one unit every 5 hours on the average.
The specialized equipment can be placed in operation at an original cost of P50,000 and it will be worthless at the time all the 10,000 units are manufactured. With this equipment four men, paid P43.75 each per hour, and a foreman, paid P75 per hour, can do the work. All the five men working together can finish one unit in 20 minutes.
Determine the gain or loss if the specialized equipment is used.
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