Same as previous Problem 2.20. except that the machine will be operated three shifts, OT 6OOOhr/yr. Note the effect of increased machine utilization on the hourly rate compared to the rate determined in Problem 2.20.
In the operation of a certain production machine, one worker is required at a direct labor rate = $10!hr. Applicable labor factory overhead rate = 50%. Capital investment in the system = $250,000, expected service life '" 10years, no salvage value at the end of that period, and the applicable machine factory overhead rate = 30%. The work cell will operate 2000hr/yr. Use a rate of return uf25% to determine the appropriate hourly rate for this work cell.