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

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 points for one machine and two machines.
b. If estimated demand is 90 to 120 customers per day, how many machines should be purchased?

Step by Step Solution

★★★★★

3.39 Rating (158 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Each machine can process 100 customers per day R 45 pe... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

686-B-M-L-O-M (4720).docx

120 KBs Word File

Students Have Also Explored These Related Management Leadership Questions!

Instructions: Please complete the 2015 federal income tax return for Fun Fair of Ventura, Inc. based upon the facts presented below. If required information is missing, use reasonable assumptions to...

A Las Vega s bakery must decide how many wedding cakes to prepare for the upcoming weekend. Cakes cost $33 each to make, and sell for $60 each. Unsold cakes are reduced to half-price on Monday, and...

A newsstand manager must decide how many daily papers to stock. Past experience has shown that demand can be approximated by a normal distribution with a mean of 400 papers and a standard deviation...

A grocery store manager must decide how to best present a limited supply of milk and cookies to its customers. Milk can be sold by itself for a profit of $1.50 per gallon. Cookies can likewise be...

Strategic Capacity planning for products and Services 1. A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers a day. One machine will result...

Question 5 Not yet answered Points out of 0.72 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...

Please help, will rate right after !! A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B. have been identified, and the...

Question 1).A manager must decide how many machines of a certain type to purchase. Each machine can process 103 customers per day. One machine will result in a fixed cost of $1,918 per day, while two...

A manager is trying to decide whether to purchase a certain part or to have it produced intomally. Internal production could use other of two process. One would entalla variable cost of $17 per unit...

Chapter - 5 Practice Problem 1 2 ( pg . 2 1 9 ) ( Please provide your solution to this practice problem showing your calculations with explanations as necessary. ) A manager must decide how many...

Suppose that East Corporation has issued voting and nonvoting stock. Investors hope that holders of the voting stock will use their power to vote out the companys incompetent management. Would you...

The Sample Corporation prepared the following income statements and income tax returns for Year 1 through Year 4. Income Statement Year 1 Year 2 Year 3 Year 4 Sales $1,000 $1,000 $1,000 $1,000...

Incurring a cost on account related to providing services in the current period would be recorded with a: Multiple Choice debit to an asset. debit to an expense. debit to a liability. credit to an...

Johnson Products had the following labor time tickets for the month of February. Required a. Calculate the amount of direct labor cost assigned to each job. b. Summarize the labor time tickets and...

Each of the following items of information may be obtained from a companys accounting records: Net income Inventory cost per unit Total liabilities Total sales by geographical area of business...

You are an audit supervisor assigned to a new client, Go-Go Corporation, which is listed on the New York Stock Exchange. You visited Go-Gos corporate headquarters to become acquainted with key...

For the list of product manufacturers below, indicate whether a job-cost system (J) or a process cost system (P) would be most appropriate. ______a. Chemicals processor ______b. Paint manufacturer...

SkiBlu, Ltd., divides its customers into Gold customers and Silver customers. The company has one full-time customer representative per 1,000 Gold customers and one full-time customer representative...

Recommend the appropriate design strategy for a new organisational offering in relation to Rogers (1962) diffusion of innovation stages.

The registrar at State University believes that decreases in the number of freshman applications that have been experienced are directly related to tuition increases. They have collected the...

Employees at Hubbell Engine Parts Company produce parts using precision machine tools according to exact design specifications. The employees are paid partially according to a piece rate system...

Apperson and Fitz is a chain of clothing stores that caters to high school and college students. It publishes a quarterly catalogue and operates a Web site that features provocatively attired males...

A simple random sample from a population with a normal distribution of 105 body temperatures has x = 98.90"F and s =0.63"F. Construct a 90% confidence interval estimate of the standard deviation of...

What is the future value of $1,100 placed in a savings account for four years if the account pays 8.00% compounded quarterly?

Butler International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 $ 950,000 1 285,000 2 345,000 3 415,000 4 255,000 All cash flows...