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ABC Company creates specialty shipping bags that they sell to pharmaceutical companies worldwide. With their current equipment, ABC can produce 12,000 shipping bags for every 10 bundles of materials purchased. Every month (20 working days), ABC purchases 100 bundles of materials.

Each bundle requires one (1) labor minute to process, and every labor hour costs an average of $14.00. Each week (5 working days), ABC pays $5,000 in overhead costs, and equipment costs $600 a day to operate.

How many shipping bags does ABC produce in a standard month (20 working days)? How many shipping bags are produced each workday (8 hours)?

Answer :

To calculate the number of shipping bags produced by ABC company, we need to consider the production capacity based on the materials purchased, labor hours, and working days.

Number of shipping bags produced in a standard month (20 working days):

Each bundle of materials produces 12,000/10 = 1,200 shipping bags.

ABC purchases 100 bundles of materials per month, so the total number of shipping bags produced in a month is 1,200 x 100 = 120,000 bags.

Number of shipping bags produced each workday (8 hours):

Each bundle of materials requires 1 labor minute to process, which is equivalent to 1/60 = 0.0167 labor hours.

ABC operates for 8 hours each workday, so the total labor hours per workday is 8 hours x 60 minutes/hour = 480 minutes.

Therefore, ABC can process 480/0.0167 = 28,740 bundles of materials in a workday.

Since each bundle produces 1,200 shipping bags, the total number of bags produced each workday is 1,200 x 28,740 = 34,488,000 bags.

In summary, ABC company produces 120,000 shipping bags in a standard month (20 working days) and 34,488,000 bags each workday (8 hours).

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