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Dear Sir
Could you please explain to me why the answer for the above question is:
Product X $80 x (60/0.05mins) = $96000I don’t understand why 60/0.05, how do I get 0.05?
Many thanks
They have typed it in a confusing way.
Since they can produce 1200 units in an hour (i.e. in 60 minutes), the time taken for each unit = 60/1200 = 0.05 minutes or in hours it takes 1/1200 (which is the same as 0.05/60).
So the throughput per hour = 80 / (0.05/60) which is the same as 80 x 60/0.05
Easier (and perhaps more obvious) is to say that each unit takes 1/1200 hours.
Therefore the throughput = 80 / (1/1200) = 80 x 1200 = 96,000
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