If the labor cost per day for Location A is $8,000 with a production of 40 units per day, and the cost per day of Location B is $9,000 with a production of 30 units per day, what is the labor cost per unit for locations A and B? Which location is more cost-efficient? Given the information in the following table, what is the weighted rating score for locations A, B, and C? Which location would you recommend based on this analysis?
- If the labor cost per day for Location A is $8,000 with a production of 40 units per day, and the cost per day of Location B is $9,000 with a production of 30 units per day, what is the labor cost per unit for locations A and B? Which location is more cost-efficient?
- Given the information in the following table, what is the weighted rating score for locations A, B, and C? Which location would you recommend based on this analysis?
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The costs in business play a very important role. Cost is involved in a business from the very start and remains to act as such till the very end. For managing all the inputs at all levels cost is incurred in the sourcing of materials, purchasing heavy machinery and equipment, training the staff, and providing them wages. Some costs in business are fixed that cannot be avoided and continues to in the way. There are other types of costs that change with time and are variable in nature. Example of fixed costs is the rent of building or a storage or monthly electricity charges. Variable cost includes expenses like purchasing production supplies (purchased as and when required, so not fixed), and labor charges (each labor is provided a wage equivalent to their contribution towards input).
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