Print Board Company is evaluating the use of AZ-17 Photo Resist for the manufacture of printed circuit boards. The major advantages of this process over the present silk-screen method include:
(a) Anticipated reduced manufacturing cycle time and cost due to elimination of the need for silk circuit screens and shorter operator time to produce circuit boards.
(b) Improved ease of registration between front and back patterns.
(c) The ability to achieve finer line widths and closer spacing between circuit paths.
The proposed AZ-17 process is as follows:
(a) Fabricate through the completion of the drilling and copper plating of inside holes.
(b) Pressure spray AZ-17 Photo Resist on one side, over bake for 10 minutes, and repeat for other side.
(c) Use the photo negative and expose each side for seven minutes in a Nu-Arc Printer.
(d) Develop in AZ-17 Developer and proceed through normal operations for making printed circuit board.
Total direct labor time for the proposed AZ-17 process is 30 minutes. The original silk-screen method uses a wire mesh stencil film, screening ink, and frames. The direct labor time to prepare the screen for each circuit board is 11/2 hours. The direct labor time to screen patterns on the printed wire board is 20 minutes. The hourly direct labor rate is $6.50. The monthly cost for materials and for equipment rental and operation needed for the proposed process is $4,000 greater than for the silk-screen method, excluding the direct labor. The company manufactures 20,000 circuit boards annually.
Required:
Compute the annual savings or added cost from changing from the silk-screen method to the new AZ-17 process. (Round all computations to the nearest dollar.)