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 100 items per hour. two workers sharing a computer can together inventory 150 items per hour. three workers sharing a computer can together inventory 160 items per hour. and four or more workers sharing a computer can together inventory fewer than 160 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? what if you assign two workers per computer? three? how many workers per computer should you assign if you wish to minimize the cost of inventorying a single item?

Explanation:

For computing the  cost of inventorying, we have to apply the formula which is shown below:

= Total costs ÷ Number of items

1. Cost of inventorying = Total costs ÷ Number of items

                                     = $125 ÷ 100 items

                                     = $1.25

Total cost = $100 + $25 = $125

2. Cost of inventorying = Total costs ÷ Number of items

                                     = $150 ÷ 150 items

                                     = $1

Total cost = $100 + $25 + $25 = $150

3. Cost of inventorying = Total costs ÷ Number of items

                                     = $175 ÷ 160 items

                                     = $1.10

Total cost = $100 + $25 + $25 + $25 = $175

$25 is the each worker pay

To minimize the cost we required two workers as the cost of inventorying is lesser than other two.

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o