You are planning to establish a company that will produce plastic mobile phone cases. The land...

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You are planning to establish a company that will produce plastic mobile phone cases. The land to construct a 500 mt? prefabricated plant can be purchased for 10,000 OMR. Prefabrication is done with modules where each module is 100mt? and costs 1,200 OMR. For the production at 30-ton plastic injection molding machine is required. The purchase price of a similar 20-ton machine was 8,000 OMR six years ago. At that time, the cost index was 156, whereas the current index is 222. The cost capacity factor is 0.65. Also, an additional 1,500 OMR is required for the additional features of the machine. The injection molding machine is semi-automatic and requires periodic labor attendance. It is estimated that the first unit can be produced in eight minutes, and the learning rate is 92%. The average production time per unit is calculated based on the production time of the 40th unit. The demand is estimated to be 1600 cases each month. The labor rate is 5 OMR per hour. Two types of raw materials (A and B) are mixed to produce each case. In total, 200 gr of raw material is required for each case, 75% of which is A, and the rest is B. Raw material A costs 6 OMR/kg, and B costs 8 OMR/kg. a. [13 points] Calculate the initial investment cost that consists of the land, construction, and machine cost. b. [13 points] Calculate the monthly manufacturing cost that consists of labor cost and material cost. You are planning to establish a company that will produce plastic mobile phone cases. The land to construct a 500 mt? prefabricated plant can be purchased for 10,000 OMR. Prefabrication is done with modules where each module is 100mt? and costs 1,200 OMR. For the production at 30-ton plastic injection molding machine is required. The purchase price of a similar 20-ton machine was 8,000 OMR six years ago. At that time, the cost index was 156, whereas the current index is 222. The cost capacity factor is 0.65. Also, an additional 1,500 OMR is required for the additional features of the machine. The injection molding machine is semi-automatic and requires periodic labor attendance. It is estimated that the first unit can be produced in eight minutes, and the learning rate is 92%. The average production time per unit is calculated based on the production time of the 40th unit. The demand is estimated to be 1600 cases each month. The labor rate is 5 OMR per hour. Two types of raw materials (A and B) are mixed to produce each case. In total, 200 gr of raw material is required for each case, 75% of which is A, and the rest is B. Raw material A costs 6 OMR/kg, and B costs 8 OMR/kg. a. [13 points] Calculate the initial investment cost that consists of the land, construction, and machine cost. b. [13 points] Calculate the monthly manufacturing cost that consists of labor cost and material cost.

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Calculation of Initial Investment Cost OMR Cost of land for 500mt2 10000 Prefabrication cost for 500... View the full answer