Question

A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $ 2,000 per day, while two machines will result in a fixed cost of $ 3,800 per day. Variable costs will be $ 20 per customer, and revenue will be $ 45 per customer.
a. Determine the break-even point for each range.
b. If estimated demand is 90 to 120 customers per day, how many machines should be purchased?



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  • CreatedDecember 30, 2014
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