A manufacturer makes 7900000 memory chips per year each

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A manufacturer makes 7,900,000 memory chips per year. Each chip takes 0.4 minutes of direct labor at $8/hr. the overhead costs are estimated at $11/direct labor hr. A new process will reduce the unit production time. By 0.01 minutes. If the overhead costs will be reduced by $5.50 for each hour by which total direct hours are reduced what is the maximum amount you will pay for the process? Assume that the process must pay for itself by the end of first year.

Reference no: EM13624800

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