Machine A and B are both capable of manufacturing a product.

They are compared as follows:

Data Machine A Machine B

Investment 80,000 50,000

Interest on capital invested 15% per annum 15% per annum Hourly charges (wages + ghc8 ghc10 power Number of pieces produced per 8pcs 5pcs hour

Annual operating hours 2,000 2,000

I) Which machine will have the lower cost per unit of output, if run for the whole year'

(ii) Will your answer in (i) above change if you are informed that 12.5% of the output of machine A gets

rejected at the inspection stage. If so, what would be the new solution