A manager has the option of purchasing one, two, or three machines. Fixed costs and potential...
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A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows: Number of Machines 1 2 3 Total Annual Fixed Costs $ 9,600 15,000 20,000 Corresponding Range of Output 0 to 300 301 to 600 601 to 900 Variable cost is $10 per unit, and revenue is $40 per unit. A. Determine the break-even point for each range. B. If projected annual demand is between 580 and 660 units, how many machines should the manager purchase? A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows: Number of Machines 1 2 3 Total Annual Fixed Costs $ 9,600 15,000 20,000 Corresponding Range of Output 0 to 300 301 to 600 601 to 900 Variable cost is $10 per unit, and revenue is $40 per unit. A. Determine the break-even point for each range. B. If projected annual demand is between 580 and 660 units, how many machines should the manager purchase?
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Solution A Breakeven point for each range Formula Answer B Number of machines For ... View the full answer
Related Book For
Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
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