PA $4-6($Static$)$ Atlas Incorporated is a toy bicycle manufacturing...

Atlas Incorporated is a toy bicycle manufacturing company producing a five$-$inch small version of the bike that Lance Armstrong rode

to win his first Tour de France. The assembly line at Atlas Incorporated consists of seven work stations, each performing a single step.

Stations and processing times are summarized here:

Step $1(30$ seconds$)$: The plastic tube for the frame is cut to size.

Step $2(20$ seconds$)$: The tube is put together.

Step $3(35$ seconds$)$: The frame is glued together.

Step $4(25$ seconds$)$: The frame is cleaned.

Step $5(30$ seconds$)$: Paint is sprayed onto the frame.

Step $6(45$ seconds$)$: Wheels are assembled.

Step $7(40$ seconds$)$: All other parts are assembled to the frame.

Under the current process layout, workers are allocated to the stations as shown here:

Worker $1$: Steps $1$ and $2$

Worker $2$: Steps $3$ and $4$

Worker $3$: Step $5$

Worker $4$: Step $6$

Worker $5$: Step $7$

Assume the workers are paid $$15$ per hour. Each bicycle is sold for $$6$ and includes parts that are sourced for $$1.$ The company has

fixed costs of $$200$ per hour. Despite Lance Armstrong's doping confession, there exists substantially more demand for the bicycle

than Atlas can supply.

Note: Round all answers to $2$ decimal places.

a$.$ What is the cost of direct labor for the bicycle?

Cost of direct labor

b$.$ How much profit does the company make per hour?

Profit

per hour

c$.$ What would be the profits per hour if Atlas would be able to source the parts $10$ percent cheaper $($ $$0\mathrm{.}90$ for the parts of one unit$)?$

Profit

per hour

d$.$ What would be the profits per hour if Atlas were able to reduce fixed costs by $10$ percent $($to $$180$ per hour$)?$

Profit

per hour

e$.$ What would be the profits per hour if Atlas were able to reduce the processing time at the bottleneck by $5$ seconds per unit

$($assume unlimited demand$)?$