Morgan Tool and Die receives an order for 30 cylinders. Morgan could produce the cylinders on the boring machine or one of the three lathes. If Morgan uses the boring machine, initial set-up cost will be $75.00, and each cylinder will take 45 minutes to produce. If a lathe is used, initial set-up cost will be $15.00, and each cylinder will take 60 minutes to produce. Morgan’s costs are $45.00 an hour for the boring machine and $35.00 an hour for the lathe. (200 POINTS)
a. Which machine should Morgan use?
b. How much will it cost Morgan to make a replacement cylinder sometime in the future?
c. What will Morgan’s cost be for each of the following quantities of cylinders: 5, 10, 20, 30, and 50?