20 Jul WHAT IS THE ANNUAL SAVING OVER THE OTHER DESIGN?
Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are Show more Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are sold for $0.70 each. Either design will serve equally well and will involve the same material and manufacturing cost except for the lathe and drill operations. Design A will require 12 hours of lathe time and 5 hours of drill time per 1000 units. Design B will require 7 hours of lathe time and 8 hours of drill time per 1000 units. The variable operating cost of the lathe including labor is $18.60 per hour. The variable operating cost of the drill including labor is $16.90 per hour. Finally there is a sunk cost of $5000 for Design A and $9000 for Design B due to obsolete tooling. (2.4) a. Which design should be adopted if 125000 units are sold each year? -. What is the annual saving over the other design? Plesase neeed correct answers Show less
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