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Stow Machining is a compression-molding plastics company that specializes in high priced jar covers for the cosmetics industry. Because appearance is so important, customers can reject covers even for minor blemishes that do not affect the cover's function. Therefore, preventing dust and contamination in the molding process is an ongoing problem for the company. Each order requires a machine setup that can be complex. The company recently implemented some major process improvements. The value-added analysis of the compression-molding process for placing good pieces in inventory appears below:

Setup mechanics earn $25 per hour. All other factory labor earns $10 per hour.
-The company is considering accepting an order for a more complex jar cover from a major customer. It estimates that each 1,000 jar cover order will take an extra 120 minutes for setup due to the complexity of the molds and an extra 20 minutes for placing good pieces in boxes. Under the old system, with all personnel earning the wages stated above, what would be the cost to process a 1,000-unit order?
A) $192
B) $493.33
C) $43.33
D) $431.33

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Stow Machining is a compression-molding plastics company that specializes in high priced jar covers for the cosmetics industry. Because appearance is so important, customers can reject covers even for minor blemishes that do not affect the cover's function. Therefore, preventing dust and contamination in the molding process is an ongoing problem for the company. Each order requires a machine setup that can be complex. The company recently implemented some major process improvements. The value-added analysis of the compression-molding process for placing good pieces in inventory appears below:
  
Setup mechanics earn $25 per hour. All other factory labor earns $10 per hour.
-The company is considering accepting an order for a more complex jar cover from a major customer. It estimates that each 1,000 jar cover order will take an extra 120 minutes for setup due to the complexity of the molds and an extra 20 minutes for placing good pieces in boxes. Under the old system, with all personnel earning the wages stated above, what would be the cost to process a 1,000-unit order?
A) $192 
B) $493.33 
C) $43.33 
D) $431.33

Quizplus · Accepted Answer

The cost includes the extra setup time and the time for placing pieces in boxes. Assuming the wages are given, calculate the cost based on the extra time required.

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