Question 1013679: . A local factory currently assembles 160 ovens per day. The factory can sell each oven for $300. Profit per oven is $40. The 15 workers are paid $14 per hour, one 8 hour shift per day, 5 days a week, 50 weeks per year. The factory is looking into buying new tools for $125,000 that will reduce the time it takes to assemble each oven by 5 minutes. The tools have a 2-year useful life.
1. How many man hours do 15 workers put together in one day? 120
2. On average, how many man-hours does it take to assemble one oven? .333 or 1/3 of an hour or 20 minutes.
3. Over the 2-year period, how much will be saved in labor costs to make the same number of ovens? Will the tools be worth the purchase?
4. What would be the earnings of one worker per year?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! A local factory currently assembles 160 ovens per day. The factory can sell each oven for $300. Profit per oven is $40. The 15 workers are paid $14 per hour, one 8 hour shift per day, 5 days a week, 50 weeks per year. The factory is looking into buying new tools for $125,000 that will reduce the time it takes to assemble each oven by 5 minutes. The tools have a 2-year useful life.
1. How many man hours do 15 workers put together in one day? 120
8 hours * 15 men = 120 man hours per day.
2. On average, how many man-hours does it take to assemble one oven? .333 or 1/3 of an hour or 20 minutes.
they worked a total of 120 man hours per day and assembled 160 ovens per day.
120 man hours per day / 160 ovens per day = .75 man hours per oven.
.75 hours * 60 = 45 minutes.
3. Over the 2-year period, how much will be saved in labor costs to make the same number of ovens? Will the tools be worth the purchase?
without the machine:
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total labor costs per day = 120 man hours * 14 dollars per hour = 1680 dollars per day.
1680 dollars per day * 5 days per week = 8400 dollars per week.
8400 dollars per week * 50 weeks per year = 420,000 dollars per year.
420,000 dollars per year * 2 years = 840,000 dollars for the two year period.
with the machine:
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45 minutes per oven is reduced to 40 minutes per oven * 160 ovens per day = 6400 minutes per day.
6400 minutes per day / 60 = 106.666... hours per day.
106.666... hours per day * 14 dollars per hour = 1493.333... dollars per day.
1493.333... dollars per day * 5 days per week = 7466.666 dollars per week.
7644.666 dollars per week * 50 weeks per year = 373,333.333... dollars per year.
373,333.333... dollars per year * 2 years = 746,666.666... dollars for the two year period.
add 125,000 for the cost of the machine and you get 746,666.666... + 125,000 = 871,666.666... for the two year period including the cost of the machine.
without the machine it costs 840,000 for the 2 year period.
with the machine it costs 871,666.666... dollars for the 2 year period.
the labor savings are 840,000 minus 746,666.666... = 93,333.333...dollars.
the labor savings are not enough to offset the additional cost of the machine.
4. What would be the earnings of one worker per year?
1 worker makes 14 dollars per hour.
8 hours per day * 14 dollars per hour = 112 dollars per day.
112 dollars per day * 5 days per week = 560 dollars per week.
560 dollars per week * 50 weeks per year = 28,000 dollars per year.
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check it out.
let me know if you agree or disagree and why.
i'm reasonably confident i'm correct.
i'm not quite sure where you got the 1/3 of an hour for the number of hours per oven.
my calculations said 120 hours per day divided by 160 ovens per day = .75 hours per oven.
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