"Montross Lumber processes wood to be shipped to construction companies. In order to keep its products uniform, Montross conducts inspections on 20% of the boards produced. Inspections cost the company $10 per hour and it takes 1 minute to inspect each board. How much would it cost to fill an order for 30,000 boards

It would cost $ 1000 for the company to fill the 30,000 board order.

Explanation:

Given details-

Inspection- on 20% of the net boards produced

Inspection cost- $ 10 per hour spent

The time needed to inspect one board- 1 minute

Total order- 30,000 board

The total cost to the company

Total board on which inspection needs to be carried- 20% of 30,000

= (20/100) *30,000 = 6000 boards

The time needed to inspect 1 board is 1 minute. Hence time needed to inspect 6000 board is 6000 minutes which is equivalent to 100 hrs (since 1 hr equals 60 min)

Cost of inspecting= $ 10 per hour

Cost to inspect 100 hours= 10*100= $ 1000

Hence cost accrued to the company to produce 30,000 boards is $ 1000

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