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Two production methods are being compared during manufacturing a timing belt pulley as shown on the...

Two production methods are being compared during manufacturing a timing belt pulley as shown on

the next page. One manual and the other automated. The manual method produces 20 pc per hour and

requires one worker at $ 30.00 per hour. Fixed cost of the manual method is $ 10,000 per year. The

automated method produces 50 pc per hour, has a fixed cost of $ 110,000 per year, and a variable cost

of $ 9.10 per hour. Determine the Break – Even Point (BEP) for the two methods; that is, determine

the annual production quantity at which the two methods have the same annual cost. Ignore the cost of

material used in the two methods. Also produce a shop drawing for the pulley as shown on the next

page.

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