An afsembly line can produce 90 units per hour The lines hou

An afsembly line can produce 90 units per hour. The line\'s hourly cost (total salaries of workers) is $4753 on straight time (the first 8 hours). Workers are guaranteed a minimum of 6 hours (i.e, they will be paid for 6 hours per day, even if they work less than 6 hours). There is a 50% premium for overtime (ie, salary is increased 50% during overtime hours), however, productivity for overtime d (ie, the number of units produced per hour drops 6%), what is the total costs if 984 units needs to be produced? rops by 6% Margin of error: +/-10 (answers within range [x-10, x+10], where x is the true answer, are considered correct).

Solution

90 units are produced per hour but productivity decreases 6% in overtime hours

First 8 hours will produce 720 units but next hour will produce 84.6 units
90 * 0.94 = 84.6
84.6 * 3 = 973.8

This is somewhat short of target production of 990 which means total 12 hours will be needed.

labor cost is $4753 for normal 8 hours shift but the premium for overtime is 50%

( 4753 * 8 ) + ( 4753 * 1.5 * 4 )
= 38024 + 28518
= 66542