A motorbike part manufacturer produces side mirrors. Two methods are possible for manufacturing and the parameters...

 

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A motorbike part manufacturer produces side mirrors. Two methods are possible for manufacturing and the parameters of each method are as shown below: Method 1 Method 2 Production Rate Daily Production Time 40 parts per hour 5 hours per day 15% 20 parts per hour 8 hours per day 10% Percent of Parts Rejected All defect free parts can be considered sold. Rejected parts cannot be sold. Find the method that maximizes profit per day if each part is made from xxx worth of material & labor and can be sold for £1,000 each. Variable overhead cost is charged at the rate of £1,500 per hour. A motorbike part manufacturer produces side mirrors. Two methods are possible for manufacturing and the parameters of each method are as shown below: Method 1 Method 2 Production Rate Daily Production Time 40 parts per hour 5 hours per day 15% 20 parts per hour 8 hours per day 10% Percent of Parts Rejected All defect free parts can be considered sold. Rejected parts cannot be sold. Find the method that maximizes profit per day if each part is made from xxx worth of material & labor and can be sold for £1,000 each. Variable overhead cost is charged at the rate of £1,500 per hour.

Answer rating: 100% (QA)

Answer Profit per day using method 1 is 101500 Profit per day us... View the full answer