Question

A manufacturer has a contract ta produce 5,000 units of a certain device. The device can be made by highly trained workmen working individually. The device can also be made by less skilled workmen working together if they are given specialized equipment and proper supervision. The highly trained workmen are paid P 20 per hour, and each can produce one unit every two hours on the average. The specialized equipment an be placed in operation at an original cost of P 60,000 and it will be worthless at the time the 5,000 units are manufactured. With this equipment four men paid P15.00 each per hour, and foreman, paid P25.00 per hour, can do the work. All the five men working together can finish one unit in 15 minutes Determine the pain or loss if the specialized equipment is used.

Answer 1

ANSWER

Earned before using specialized equipments:

We want 5000 unit of certain devices.
for 1 unit it will take 2hrs
taking 5 persons for 5 units it will take 2 hrs
Total amount for 5 persons to produce 5 units is 200.
For a total of 5000 units:
5 persons ---> 200 ---> 2hrs ---> 5 units
2000 hrs will be needed for 5000 units
for 2hrs -----> 200
2000 hrs -----> 2,00,000 for 5000 unit productions.

So total amount for 5000 unit of equipments = Rs. 2,00,000

Earned after using specialized equipments:
for 4 mens ----> 15 * 4 = Rs. 60/hour
foreman --------> 25 / hour
-----------------------------------------
total 5 men -----> 85/hour
Since,
15min--------> 1 unit
5/4 hr ---------> 5 unit
1250 hr -------> 5000 units

for 1 hr ---> Rs. 85
for 1250 hr -------> 85 * 1250 = Rs. 1,06,250

Hence we can say, before using specialized tool amount needed was Rs. 2,00,000,
And after using specialized tools amount needed was Rs. 1,06,250.

So,

from above we can conclude that we can get the gain of (2,00,000 - 1,06,250 =93,750) using specialized tools.

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