Question

Help Save Saw Homework Asas Inc. 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 Inc. consists of seven workstations, each performing a single step. Stations and processing times are summarized here: • Step 1 (30 sec.) The plastic tube for the frame is cut to size. . Step 2 125 sec.) The tube is put together Step 3 (35 sec.) The frame is glued together • Step 4 125 sec.): The frame is cleaned. Step 5 (25 sec.) Paint is sprayed onto the frame. • Step 6 (50 sec Wheels are assembled. Step 740 sec Al other parts are assembled to the frame. Under the current process layout, workers are allocated to the stations as shown here: • Workert 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 $10 per hour Each bicycle is sold for $6 and includes parts that are sourced for $1. The company has feed costs of $180 per hour. Despite Lance Armstrong's doping confession, there exists substantially more demand for the bicycle than Atlas can supply Instructions: Do not round intermediate calculations. Round all answers to 2 decimal places What is the cost of direct labor for the bicycle? per unit How much profit does the company make per b hour? per hour What would be the profits per hour Atlas c. would be able to source the parts 12 percent cheaper (50.88 for the parts of one unit? per hour < Prey 11 of 12 Next > CSearch or type URL 4 3 5 6 7 8 9 ) 0 E R T Y 0 Р G

Answer 1

Solution

a.  Cost of Labour per Hour $10

Time of Worker 1: Steps 1 & 2: 30sec & 25sec =55 sec

Time of Worker 2: Steps 3 & 4: 35sec & 25sec =60 sec

Time of Worker 3: Step   5 : 25sec =25 sec

Time of Worker 4: Step 6 : 50sec =50 sec

Time of Worker 5: Step 7 : 40sec =40 sec

Total Time for manufacturing a bicycle= 55+60+25+50+40=230secs

if $10 is for 1 hour = 60 min =60*60 = 3600 secs

then for 230 secs =10/3600*230 = $ .64 per unit of bicycle

Thus Cost of direct labour per unit of bicycle = $ .64

b.   Time required for 1 bicycle: 230 secs

No. of bicycles in 1 hour or 3600secs=1/230*3600=15.65 = 15 approx.

Selling Price of 15 Bicycle = $6*15 =$ 90

Less: Direct Labour per hour =$ 10

: Sourced Part for 15 Bicycle. = $1*15 =$ 15

: Fixed Cost per hour i.e.for 15 Bicycle. =$