LEARNING EXERCISE 2 1. Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are sold for $0.70 each. Either design will serve equally well and will involve...

Extracted text: LEARNING EXERCISE 2 1. Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are sold for $0.70 each. Either design will serve equally well and will involve the same material and manufacturing cost except for the lathe and drill operations. Design A will require 12 hours of lathe time and 5 hours of drill time per 1,000 units. Design B will require 7 hours of lathe time and 8 hours of drill time per 1,000 units. The variable operating cost of the lathe, including labor, is $18.60 per hour. The variable operating cost of the drill, including labor, is $16.90 per hour. Finally, there is a sunk cost of $5,000 for Design A and $9,000 for Design B due to obsolete tooling. a. Which design should be adopted if 125,000 units are sold each year?2w gawen ni yilaunsm b. What is the annual saving over the other design? dipet jeen e1s enoiluloe uoy eue elsM evip elshetem pnimsel ertt of 1ele vem uoY ugjuo ioubivibni ns al airlT