The Tiffiny Company makes diamond rings
The Tiffiny Company makes diamond rings. It has provided the following information: Units of Output 2 Units 4 Units Direct materials $ 18,000 $ 36,000 Workers’ wages 6,800 11,560 Variable Overhead 850 1,445 Supervisors’ salaries 32,000 32,000 Equipment depreciation 15,200 15,200 Management is unsure of the learning curve in its operations but it knows that it pays $400 per hour to its workers. Assume all jobs to be equal in size. Also assume that all units are within the relevant range. Keep your answer rounded . Suppose that the manager recalls that the first ring took 10 hours to make. What is the time needed to produce the 8th ring using the incremental unit-time method? A) 3.65 hours B) 3.43 hours C) 6.1hours D) None of the above What is the total cost of building 8 rings by a new employee using the cumulative average-time method? A) $133,600 B) $130,450 C) $141,277 D) None of the above
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