PROBLEM DESCRIPTION:

You must choose between one of three system configurations $-$ I, II$,$ or III. System I requires moderately skilled

labor and moderately priced material. System II uses lower$-$skilled labor, but requires higher material costs

due to waste and inefficiency. System III uses very highly skilled labor and automation, with low material

costs.

Table $1,$ System Configuration Comparisons

For this determination, consider purchase price, labor, and overhead to comprise fixed costs and material

costs to comprise the variable costs. Assume twelve months per year, $20$ work days per month, and $8$ work

hours per day.