The XYZ Company Produces Output Using Labor (Which It Purchases

Essay

The XYZ company produces output using labor (which it purchases on an as-needed basis in the market for unskilled workers at a wage of $5 per hour) and one machine (which it is obligated to lease at a rental rate of $300 per hour).The planning horizon precludes XYZ from renting or purchasing any additional machines, as the current machine has a capacity of 80 units of output per hour, which exceeds the projected demand for the firm's product.The firm has no alternative use for the machine it leases, and the contract precludes it from subleasing it to another party.The company currently employs one worker who produces 10 units of output per hour.A recent report from the engineering department reveals that, given the plant's current capacity, two workers could produce 20 units of output per hour, three workers could produce 30 units of output per hour, and four workers could produce a total of 40 units of output per hour.
a.Complete the following table: