FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Suppose that a constraint for assembly time has a shadow price of \$50/hour
for 15 hours in either direction and that all available assembly time is currently
used (would require overtime to do more the salary of workers is $30 and they
receive 50% extra pay for overtime what should management do?
Pay $30 per hour and net $20 profit per hour for all 15 hours
Pay 545 per hour and net $5 profit per hour for all 15 hours
Pay $15 per hour overtime net $35 profit per hour for all 15 hours
Do not pay the S45 hour premium rate to achieve only $15 more proht per hour
Pay $50 per hour shadow price for all 15 hours
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Transcribed Image Text:Suppose that a constraint for assembly time has a shadow price of \$50/hour for 15 hours in either direction and that all available assembly time is currently used (would require overtime to do more the salary of workers is $30 and they receive 50% extra pay for overtime what should management do? Pay $30 per hour and net $20 profit per hour for all 15 hours Pay 545 per hour and net $5 profit per hour for all 15 hours Pay $15 per hour overtime net $35 profit per hour for all 15 hours Do not pay the S45 hour premium rate to achieve only $15 more proht per hour Pay $50 per hour shadow price for all 15 hours
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