Problem
Venus Computer can produce 23,000 personal computers a year on its daytime shift. The fixed manufacturing costs per year are $2 million and the total labor cost is $9,109,000. To increase its production to 46,000 computers per year, Venus is considering adding a second shift. The unit labor cost for the second shift would be 25% higher than the day shift, but the total fixed manufacturing costs would increase only to $2.4 million from $2 million.
(a) Compute the unit manufacturing cost for the daytime shift.
(b) Would adding a second shift increase or decrease the unit manufacturing cost at the plant?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.