machine part to be machined may be made either from an alloy of aluminum or steel. There is an order for 8,000 units. Steel costs P3.80 per kg, while aluminum costs 8.70 per kg. If steel is used, the steel per unit weighs 110 grams; for aluminum, 30 grams. When steel is used, 50 units can be produced per hour; for aluminum, 80 units per hour with the aid of a tool costing P640, which will be useless after the 8,000 units are finished. The cost of the machine and operator is P10.80 per hour. If all other costs are identical, determine which material will be more economical.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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machine part to be machined may be made either from an alloy of aluminum or steel. There is an order for 8,000 units. Steel costs P3.80 per kg, while aluminum costs 8.70 per kg. If steel is used, the steel per unit weighs 110 grams; for aluminum, 30 grams. When steel is used, 50 units can be produced per hour; for aluminum, 80 units per hour with the aid of a tool costing P640, which will be useless after the 8,000 units are finished. The cost of the machine and operator is P10.80 per hour. If all other costs are identical, determine which material will be more economical.
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