Suppose, for example, that Schaller Company adds a half shift for the drilling department,
increasing the drilling hours from 120 to 180 per week. Throughput will
now be $37,800, an increase of $10,800 ($180 60 additional hours). Furthermore,
as you can check, the optimal mix is now 18 units of Part X and 54 units of Part Y. Is
the half shift worth it? This question is answered by comparing the cost of adding the
half shift with the increased throughput. If the cost is labor—say overtime at $50 per
hour (for all employees)—then the incremental cost is $3,000, and the decision to add
the half shift is a good one