Question

Imagine you have some workers and some handheld computers that you can use to take inventory at a warehouse. There are diminishing returns to taking inventory. If one worker uses one computer, he can inventory 150 items per hour. Two workers sharing a computer can together inventory 200 items per hour. Three workers sharing a computer can together inventory 250 items per hour. And four or more workers sharing a computer can together inventory 260 items per hour. Computers cost $100 each and you must pay each worker $25 per hour.

If you assign one worker per computer, what is the cost of inventorying a single item?

Answer 1

Answer: If we assign a computer worker the unit cost for inventing an item is $ 0.83

Explanation:

Computer costs $100

Worker charges $ 25 an hour.

If a worker can inventory 150 items in one hour then the unit cost would be:

Computer:  $ 100/150 items = $ 0.67

Worker salary $ 25 per hour.

$ 25/150 items = U$ 0.17

Total unit cost = $ 0.83