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


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.