hw11 - ORIE 350 Fall 2006 Due Homework#11 1 Uranus Hertz...

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ORIE 350 Fall 2006 Homework #11 Due November 14, 2006 1. Uranus Hertz Industries remanufactures industrial drives from used components. For one particular product, an extruder screw assembly (ESA), several parts are required. Each part is first tested to see if it functions. If not, the part is discarded with zero salvage value. Over time, Uranus Hertz has found that used parts tend to have rather fixed scrap rates. As a consequence, it is easy to estimate the standard costs of the remanufactured ESA’s. The relevant data follows: Component No. Req’d Per ESA Scrap Rate Motor 1 18% Heater 4 6% Controller 2 9% Screw 1 15% Barrel 1 10% Housing 1 0% Uranus Hertz has just received a quote for components. They can buy used motors for $80.00 each, used heaters for $35 each, used controllers for $140 each, screws for $340 each, barrels for $425 each, and housings for $120 each. Direct labor is 3 hours per unit. Direct labor costs $16 per hour. Fixed overhead is $840,000, assigned on direct labor hours. Shipping containers cost $40 each.
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