Suppose that an additional 350 hours per week can be obtained from the milling machines by working overtime. The incremental cost would be $2.00 per hour. What would be the allowable increase(from the excel sensitivity report) in overtime when compared to additional hours that can be obtained

Solution :

It is given that :

Additional time obtained per week from milling machines = 350

The incremental cost = $ 2 per hour

Therefore, the allowable increase for milling operation is 400.

This indicates that we can accommodate additional constraint RHS of hours.

Also we have to consider the impact on the profit of 2.25 which is an incremental cost of is well affordable.

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough

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