A garment manufacturing company makes 380,000 articles per year. Each article takes 95 minutes of direct labor at the rate of $9.00 per hour. The overhead costs are $7.50 per direct labor hour. The average price of the finished product is $80 per article. A new machine will reduce the direct labor hour by 15 minutes per article. What is the maximum amount the company should pay for the new machine if it wants to break even by the end of the first year?

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The Answer of A garment manufacturing company makes 380,000 articles per year. Each article takes 95 minutes of direct labor at the rate of $9.00 per hour. The overhead costs are $7.50 per direct labor hour. The average price of the finished product is $80 per article. A new machine will reduce the direct labor hour by 15 minutes per article. What is the maximum amount the company should pay for the new machine if it wants to break even by the end of the first year?

A Garment Manufacturing Company Makes 380,000 Articles Per Year