Iemecon Review Problem Set

Topics: Steel, Costs, Cost Pages: 5 (1375 words) Published: June 16, 2012
Selections in Present Economy : Problem Set
1. In a mining site in Mindoro, the ore contains, on the average, one ounce of gold per ton. One method of processing “A” costs Php 1,500 per ton and recovers 90% of the gold. Another method “B” costs only Php 1,200 per ton and recovers 80% of the gold. If the gold can be sold at Php 4,000 per ounce, which method is better and by how much?

2. The making of rivet holes in structural steel members can be done by two methods. The first method consists of laying out the position of the holes in the members and using a drill press costing Php 30,000. The machinist is paid Php 20 per hour and he can drill 30 holes per hour. The second method makes use of a multiple-punch machine costing Php 27,500. The punch operator is paid Php 18 an hour and he can punch out 4 holes every minute. This method also requires an expense of Php 0.70 per hole to set the machine. a. If all other costs are assumed equal, what is the total cost for each machine for 6,000 holes, assuming that the total cost of each machine is charged to these holes? b. For how many holes will the costs be equal?

3. The monthly demand for ice cans being manufactured by Mr. Cool is 3,200 pieces. With a manually operated guillotine, the unit cutting cost is Php 25. An electrically operated hydraulic guillotine was offered to Mr. Cool at a price of Php 275,000 and which will cut by 30% the unit cutting cost. Disregarding the cost of money, how many months will Mr. Cool be able to recover the cost of the machine if he decides to buy now?


1. GMA will be visiting an automobile plant. It was decided by the plant management that they must paint the plant. Boysen paint costs Php 70 per gallon and covers 350 sq. ft. per gallon. The manufacturer claims that it will last 5 years and can be applied at a rate of 100 sq. ft. per hour. General paint costs Php 100 per gallon and covers 500 sq. ft. per gallon. It will last for 4 years and can be applied at a rate of 125 sq. ft. per hour. If the painter is Paid Php 15 per hour, which paint should be used?

2. The volume of raw material required for a certain product is 2.02 cu. cm. The finished product volume is 1.05 cu. cm. The time for machining each piece of the product is 45 seconds for steel and 30 seconds for brass. The cost of steel is Php 26.50 per kg. and the value of steel scrap is negligible. The cost of brass is Php 51.25 per kg. and the value of brass scrap is Php 16 per kg. The wage of the operator is Php 25 per hour and the overhead cost of the machine is Php 15 per hour. The weight of steel and brass are 0.0081 and 0.0088 kg. per cu cm., respectively. Which material will you recommend?

3. High carbon steel or alloy steel can be used for the set of tools on a lathe. The tools must be sharpened periodically. Data for each are as follows: | |High Carbon Steel |Alloy Steel | |Output per hour |60 pcs. |70 pcs. | |Time between tool grinds |4 hours |6 hours | |Time required to change tools |1 hour |1 hour |

The wage of the lathe operator is Php 24 per hour, based on the actual working hours. The tool changer costs Php 30 per hour. Overhead costs for the lathe are Php 14 per hour, including tool-change time. A set of unsharpened high carbon steel costs Php 500 and can be ground ten times; a set of unsharpened alloy steel costs Php 650 and can be ground five times. Which type of steel should be used?


1. A company manufactures 1,000,000 units of a product yearly. A new design of the product will reduce materials cost by 12%, but will increase processing...
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