1. Two workers, A and B, produce the same product on identical machines.

A
receives P25.00 per hour and he produces 100 units per hour. B is able to
produce 120 units per hour. The machine rate or cost of operation of the
machines used by them is P100.00 per hour.
a. Determine the cost per piece for worker A.
b. Determine the hourly wage of worker B in order that his cost per piece will
equal that of A.
A.) Machine cost: 100
Direct labor: 25
Total cost: 125/100 =
1.25 per unit
B.) (1.25) (120) = 150 (Total cost)- 100 (Machine cost) =
50 (Direct Labor)
2. A machine used for cutting materials in a factory has the following outputs per
hour at various speeds and requires periodic tool regrinding at the intervals cited.

Speed Output per hour Tool regrinding

A 200 pieces Every 8 hours

B 250 pieces Every 7 hours

C 280 pieces Every 5 hours

A set of tools costs P1, 800 and can be ground twenty items. Each regrinding
costs P18.00 and the time needed to regrind and change tool is 1 hour. The
machine operator is paid P28.00 per hour, including the time the tool is changed.
The tool grinder who also sets the tools to the machine is paid P25.00 per hour.
The hourly rate chargeable against the machine is P54.00, regardless of
machine speed. Which speed is the most economical?

Sales:
A= (1800) (200) (20) = 7,200,000
B= (1800) (250) (20) = 9,000,000 Regrinding cost : 18
C= (1800) (280) (20) = 10,080,000 Machine operator : 28
Tool grinder : 25
Machine cost : 54

Cost: Total cost : 125

A = (8) (20) (125) (200) = 4,000,000
B = (7) (20) (125) (250) = 4,375,000
C = (5) (20) (125) (280) = 3,500,000

A B C

Sales 7,200,000 9,000,000 10,080,000

Cost 4,000,000 4,375,000 3,500,000

Gross profit 3,200,000 4,625,000 6,580,000