A company has introduced a process improvement that reduces processing time for each unit, so that output is increased by 25% with less material,...

. A company has introduced a process improvement that reduces processing time for each unit, so that output is increased by 25% with less material, but one additional worker is required. Under the old process, five workers could produce 60 units per hour. Direct labor costs are $12 per hour per worker, and material input was previously $16/unit. For the new process, material is now $10/unit. Overhead (both old and new methods) is charged at 1.6 times direct labor cost. Finished units sell for $31 each (both methods).