A manager has the option of purchasing one, two, or three machines. Fixed costs and potential...

  

Transcribed Image Text:

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?

Answer rating: 100% (QA)

Solution A Breakeven point for each range Formula Answer B Number of machines For ... View the full answer