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Question

Refer to the accompanying process chart for an automobile oil change. Complete parts (a) and (b) if: The mechanic earns $45 per hour (including variable fringe benefits). The process is performed twice per hour (on average). The shop is open 330 days a year, 9 hours a day. The mechanic does not get paid for idle time. There can be only two cycles per hour regardless of the cycle time.

a. The total labor cost associated with the process is $________ per year. *(Enter your response rounded to the nearest whole number.)*

b. If steps 7, 10, 12, and 15 were eliminated, the annual labor savings associated with implementing this new process would be

$_______ per year. *(Enter your response rounded to the nearest whole number.)*