What is the labor productivity per labor hour for product

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Reference no: EM13915377

Problem 1

In an average month, Acme Copy Shop produces 175,000 copies per month. Acme is evaluating two machines to replace its existing copier. Machine A would cost $5,000 per month and have a variable cost of $0.040 per copy. Machine B would cost $4,000 per month and have a variable cost of $0.045 per copy.

(a) If all other considerations are equal, which machine should Acme choose? Why?

(b) Acme is hoping to obtain a major new customer. If successful, 50,000 copies would be added to monthly volume. If no other factors change, would your answer to (a) be different? Why?

Problem 2

Apex Oil Exploration Company currently pays Zenith Trucking Company $9,500 per month to transport oil from one of Apex's oil fields to a local refinery. To reduce costs, Apex is considering whether to acquire its own tanker truck to replace the service provided by Zenith. The truck would cost $105,000 and is estimated to have a useful life of 5 years. Operating expenses for the truck are estimated to be $7,000 per month. The company's evaluation discount rate for a proposal of this type is 12%. Should Apex proceed with this proposal? Why?

Problem 3

Acme Industries, Inc. produces fans for computer server farms. The company makes 600 fans per day using the following resources:

Item	Units	Number of units		Cost per unit
Units produced per day	Fans		600
Resources used per day:
Labor hours	Hours		60	5	30.00
Raw material	Pounds		3,000		9.00
Energy	Dollars	5	1,000
Capital	Dollars	5	3,000

Based on this data, answer the following questions. Label your numeric answer appropriately. For example, the answer to (a) would be x units per labor hour - the "units per labor hour" must be a part of the answer.

(a) What is the labor productivity per labor hour for this product?

(b) What is the energy productivity for this product?

Reference no: EM13915377

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