Question

Sweatshop, Inc. producest-shirts using 4 fabric cutting machines and 8 workers working an 8 hour shift per day. Based on Professor Ray’s economics class the owner, Madonna, just completed, she has calculated that the 4th fabric cutting machine she leased produced 30 t-shirts per hour and the 8th worker she hired produced 20 t-shirts per hour. She leases the fabric cutting machines at what works out to be $320/day and pays her workers $20/hour. a. Does Madonna have the correct mix of fabric cutting machines and workers? Why or why not? If not, should she lease more fabric cutting machines or hire more workers? (4 points) b. Cutup, Inc., the company that has leased the fabric cutting machines toSweatshop, Inc. for the past three years has offered to let s been $6,000 per month and Cutup figures that based on their usage to date they most likely have 3 more years of productivity Should Sweatshop, Inc. continue leasing the machines or buy them? Why or why not?

Answer 1

Hie,

Question is not clear and all information is not available;

1.What is the sale(unit)and sale(price) figures of t-shirts of all machine in a month/day.

2.Appropriate mix of 4 machine and their usage is only possible when per month production capacity of each machine as well as earning capacity and their running expenses is available.

3.Other information regarding hiring of machine rent and their cost is not available,so on the basis of that,calculation of other options is working out whether the sweatshop INC hire,lease,own machines.