UGRD-ENG6203 Engineering Economics

(Prelim Exam)
Made By (DARKX)
Highest grade: 80.00 / 100.00.

Refer to the paragraph below to answer the question

An executive receives an annual salary of P600, 000 and his secretary a salary of P180, 000. A certain
task can be performed by the executive working alone in four hours. If he delegates the task to his
secretary wit will require him 30 minutes to explain the work a d another 45 minutes to check the work.
Due to the unfamiliarity of the secretary to do the task, it takes her an additional time of 6 hours after
being instructed. Considering salary cost only, determine the cost of performing the task by each
method, if the secretary works 2400 hours a year and the executive 3000 hours a year.

Cost of performing the task:Secretary working with executive

ANSWER: P737.50

Refer to the paragraph for the questions below

A cement grinding mill “A” with a capacity of 50 tons per hour utilizes forged steel grinding balls costing
P12, 000 per ton, which have a wear rate of 100 grams per ton cement milled. Another cement mill “B”
of the same capacity uses high chrome steel grinding balls costing P50, 000 per ton with wear rate of 20
grams per ton cement milled. Determine the more economical grinding mill, considering other factors to
be the same.

For Mill B:

ANSWER: P50/hour

Refer to the paragraph below to answer the question

An industrial engineer has designed two alternative methods of accomplishing a production job. Both
methods involve the acquisition of the same working place and other capital equipment to be used for
this job only. Method A calls for a crew consisting of three men each costing P30000 per hour. This
method will result in the production of 10 units per hour of which two will be rejects.

Method B calls for a crew of two men each costing P35.00 per hour and should result in the production
of eight units per hour of which one will be reject.

The cost of the direct material lost in each reject is P20.00. If a certain total number of units is to be
produced, find which method is more economical.

Method B:

ANSWER: Per unit cost = 12.86

Refer to the paragraph below to answer the question

An executive receives an annual salary of P600, 000 and his secretary a salary of P180, 000. A certain
task can be performed by the executive working alone in four hours. If he delegates the task to his
secretary wit will require him 30 minutes to explain the work a d another 45 minutes to check the work.
Due to the unfamiliarity of the secretary to do the task, it takes her an additional time of 6 hours after
being instructed. Considering salary cost only, determine the cost of performing the task by each
method, if the secretary works 2400 hours a year and the executive 3000 hours a year.

Cost of performing the task:Executive alone

ANSWER: P800

Refer to the paragraph for the questions below

A cement grinding mill “A” with a capacity of 50 tons per hour utilizes forged steel grinding balls costing
P12, 000 per ton, which have a wear rate of 100 grams per ton cement milled. Another cement mill “B”
of the same capacity uses high chrome steel grinding balls costing P50, 000 per ton with wear rate of 20
grams per ton cement milled. Determine the more economical grinding mill, considering other factors to
be the same.

Selection:

ANSWER: Therefore, Mill B is more economical than Mill A

An industrial engineer has designed two alternative methods of accomplishing a production job. Both
methods involve the acquisition of the same working place and other capital equipment to be used for
this job only. Method A calls for a crew consisting of three men each costing P30000 per hour. This
method will result in the production of 10 units per hour of which two will be rejects.

Method B calls for a crew of two men each costing P35.00 per hour and should result in the production
of eight units per hour of which one will be reject.

The cost of the direct material lost in each reject is P20.00. If a certain total number of units is to be
produced, find which method is more economical.

Method A:

ANSWER: Per unit cost =16.25

Refer to the paragraph for the questions below

A cement grinding mill “A” with a capacity of 50 tons per hour utilizes forged steel grinding balls costing
P12, 000 per ton, which have a wear rate of 100 grams per ton cement milled. Another cement mill “B”
of the same capacity uses high chrome steel grinding balls costing P50, 000 per ton with wear rate of 20
grams per ton cement milled. Determine the more economical grinding mill, considering other factors to
be the same.

For Mill A:

ANSWER: P60/hour

Refer to the paragraph below to answer the question

An industrial engineer has designed two alternative methods of accomplishing a production job. Both
methods involve the acquisition of the same working place and other capital equipment to be used for
this job only. Method A calls for a crew consisting of three men each costing P30000 per hour. This
method will result in the production of 10 units per hour of which two will be rejects.

Method B calls for a crew of two men each costing P35.00 per hour and should result in the production
of eight units per hour of which one will be reject.

The cost of the direct material lost in each reject is P20.00. If a certain total number of units is to be
produced, find which method is more economical.

ANSWER: Therefore method A is more economical than method B.

ANSWER: 18.8

A machine part to be machined may be made either from an alloy of aluminum or steel.
There is an order for 8000 units. Steel costs P3.80 per kg. while aluminum costs P8.70 per kg.
If steel is used, the steel per unit weighs 110grams, for aluminum, 30 grams. When steel is
used, 50 units can be produced per hour, for aluminum, 80 units per hour with aid of tool
costing P640, which will be useless after the 8,000 units are finished. The cost of the
machine and the operator is P10.80 per hour. How much is the cost per unit if steel is used?

ANSWER: The total cost of steel is P0.634/unit

The ore of a gold mine in the Mountain Province contains, on the average, 0.5 gram of gold
per ton. Method A of processing cost P1,650 per ton and recovers 93% of the gold while
Method B costs only P1,500 per ton and recovers 81% of the gold. If gold can be sold at
P8,500 per gram, how much will be the net profit for method B?

ANSWER: The net income of Method B is P1,942.50.

The ore of a gold mine in the Mountain Province contains, on the average, 0.5 gram of gold
per ton. Method A of processing cost P1,650 per ton and recovers 93% of the gold while
Method B costs only P1,500 per ton and recovers 81% of the gold. If gold can be sold at
P8,500 per gram, how much will be the net profit for method A?

ANSWER: The net income of Method A is P2,302.50

A machine part to be machined may be made either from an alloy of aluminum or steel.
There is an order for 8000 units. Steel costs P3.80 per kg. while aluminum costs P8.70 per kg.
If steel is used, the steel per unit weighs 110grams, for aluminum, 30 grams. When steel is
used, 50 units can be produced per hour, for aluminum, 80 units per hour with aid of tool
costing P640, which will be useless after the 8,000 units are finished. The cost of the
machine and the operator is P10.80 per hour. How much is the cost per unit if aluminum is
used?

ANSWER: The total cost of alloy of aluminum is P0.476/unit.