A machine part requires the making of several holes in each piece. Two methods are available. The
Question:
A machine part requires the making of several holes in each piece. Two methods are available. The first consists of laying out the position of the holes with dividers and a center punch and then drilling. In this method, a workman, who is paid P28.00 per hour, can complete 2 pieces per minute. The other method is to make a drill jig consisting of P3,000 for using the drilling of the holes. By this method, a workman, who is paid P24.00 per hour, can complete 6 pieces per minute. All other costs are the same for both methods.
(a) Determine the comparative costs for making 24,000 pieces. Assume that the cost of the drill jig is charged to this operation.
(b)Determine the number of pieces that will have to be made so that the costs will be the same for both methods.
Accounting for Decision Making and Control
ISBN: 978-1259564550
9th edition
Authors: Jerold Zimmerman