Your company has received an order for 20 units of a product. Th e labor cost to produce the item is $9.50 per hour. The setup cost for the item is $60 and material costs are $25 per unit. The item is sold for $92. Th e learning rate is 80 percent. Overhead is assessed at a rate of 55 percent of unit labor cost.(a) Determine the average unit cost for the 20 units if the firstunit takes four hours.(b) Determine the minimum number of units that need to bemade before the selling price meets or exceeds the averageunit cost.
Your company has received an order for 20 units of a product. Th e labor cost to produce the item is $9.50 per hour. The setup cost for the item is $60 and material costs are $25 per unit. The item is sold for $92. Th e learning rate is 80 percent. Overhead is assessed at a rate of 55 percent of unit labor cost.(a) Determine the average unit cost for the 20 units if the firstunit takes four hours.(b) Determine the minimum number of units that need to bemade before the selling price meets or exceeds the averageunit cost.
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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Your company has received an order for 20 units of a product. Th e labor cost to produce the item is $9.50 per hour. The setup cost for the item is $60 and material costs are $25 per unit. The item is sold for $92. Th e learning rate is 80 percent. Overhead is assessed at a rate of 55 percent of unit labor cost.
(a) Determine the average unit cost for the 20 units if the first
unit takes four hours.
(b) Determine the minimum number of units that need to be
made before the selling price meets or exceeds the average
unit cost.
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