Question

Imagine you have some workers and some handheld computers that you can use to take inventory at a warehouse. There are diminishing returns to taking inventory. If one worker uses one computer, he can inventory 100 items per hour. Two workers sharing a computer can together inventory 150 items per hour. Three workers sharing a computer can together inventory 160 items per hour. And four or more workers sharing a computer can together inventory fewer than 160 items per hour. Computers cost $100 each and you must pay each worker $25 per hour. Instructions: In parts a and b, round your answers to two decimal places. In part c, enter your answer as a whole number. a. If you assign one worker per computer, what is the cost of inventorying a single item

Answer 1

Answer: $1.25

Explanation:

Cost of inventorying a single item:

= (Cost of computer + Cost to employ worker per hour) / Items inventoried per hour

= (100 + 25) / 100

= $1.25