Ali bey has a small manufacturing firm at the Organize Sanayi. One of his customers asks...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Ali bey has a small manufacturing firm at the Organize Sanayi. One of his customers asks him if he could make a new product, called zamazingo, for them. Ali bey thinks, he needs to buy an zamazingo machine for production. He could buy the machine from Germany, Expo Co. Expo Co. sells the machine for €10,000. The current exchange rate is €1 = 6,30 TL. The machine uses advanced technology and its variable cost of producing zamazingo is not linear, but it is a function of yearly production. If the yearly production is Q units, then the per unit variable cost is 8-LOG(Q) TL. Note that the variable cost is in TL, but the fixed cost is in €'s. The market price of zamazingo is 10 TL. Important Note: The Excel function for Log(X) is also LOG(X). Since LOG(0) is undefined, make sure that in your solution table starting Q value must be at least 1 or more! (6 pt) a) What is the break-even quantity for this new product line, if Ali bey buys the machine from Expo Co.? (4 pt) b) If Ali bey thinks that he could sell only 5000 units next year, what would be the max €/TL, exchange rate that the investment is still viable (that is the break-even quantity will be 5000 units)? Ali bey has a small manufacturing firm at the Organize Sanayi. One of his customers asks him if he could make a new product, called zamazingo, for them. Ali bey thinks, he needs to buy an zamazingo machine for production. He could buy the machine from Germany, Expo Co. Expo Co. sells the machine for €10,000. The current exchange rate is €1 = 6,30 TL. The machine uses advanced technology and its variable cost of producing zamazingo is not linear, but it is a function of yearly production. If the yearly production is Q units, then the per unit variable cost is 8-LOG(Q) TL. Note that the variable cost is in TL, but the fixed cost is in €'s. The market price of zamazingo is 10 TL. Important Note: The Excel function for Log(X) is also LOG(X). Since LOG(0) is undefined, make sure that in your solution table starting Q value must be at least 1 or more! (6 pt) a) What is the break-even quantity for this new product line, if Ali bey buys the machine from Expo Co.? (4 pt) b) If Ali bey thinks that he could sell only 5000 units next year, what would be the max €/TL, exchange rate that the investment is still viable (that is the break-even quantity will be 5000 units)?
Expert Answer:
Answer rating: 100% (QA)
a To calculate the breakeven quantity for the new product line we need to determine the total cost and total revenue for each level of production and then find the production level where the total rev... View the full answer
Related Book For
Exploring Management
ISBN: 978-1119231936
5th edition
Authors: John R. Schermerhorn, Daniel G. Bachrach
Posted Date:
Students also viewed these accounting questions
-
A small manufacturing firm is considering purchasing a new machine to modernize one of its current production lines. Two types of machines are available on the market. The lives of machine A and...
-
A manufacturing company decided to buy an automated machine in order to produce a new kind of computer accessories. The designed production capacity of this company is 300,000 units per year. As the...
-
A small manufacturing firm produces two microwave switches, switch A and switch B. Each switch passes through two departments: assembly and testing. Switch A requires 4 hours of assembly and 1 hour...
-
How did your parents communication with you influence your self-concept?
-
As a muscle car aficionado, a friend of yours likes to restore cars of the 60s and 70s and sell them for a profit. He started his latest project (a 1965 Shelby GT350) four months ago and has a total...
-
At sea level, an air parcel at 20C has a relative humidity of 50%. As the unsaturated air parcel rises 1 km up a mountain, the air cools to a temperature of 10C and becomes completely saturated. The...
-
Public Expenditure on Education Figure 2.27 shows the public expenditure on education as percentage of Gross Domestic Product (GDP) for all countries. The mean expenditure is $\mu=4.7 %$ and the...
-
You were recently hired as a manager for international operations of Despoyle Chemical Corporation, a major manufacturer of dyes, fertilizers, and other industrial chemicals. Despoyle has chemical...
-
Hawkeye Inc. has signed a building contract with a customer. The contract price is $1,800,000, and construction costs are estimated to be $1,200,000. The actual costs and estimated future costs by...
-
Each of the following reactions has been reported in the chemical literature. Predict the product in each case, showing stereochemistry where appropriate. (a) CHs CH hea (b) (CH3)2(-C(CH3): T -...
-
Provide specifics of the deal. If you would have declined a plea bargain altogether, explain your reasons.? an arraignment, the defense and prosecution may discuss a guilty plea in exchange for...
-
Privatizing the Worlds Second Largest Water Reserve South America will allegedly witness a privatization of the Guarani Aquifer, the worlds second largest known water reserve, by Coca-Cola and Nestl....
-
How is the demand for female labor changing in the taxi industry? Uber, along with Careem, its Middle East competitor, is hiring women drivers in Saudi Arabia after the Kingdom announced plans to...
-
The NLRB conducted an election among employees of Savair Manufacturing Co. to determine whether the union would represent the employees. During the election, recognition slips were distributed. The...
-
How would the changes cited in the news clip change the distribution of income across the quintiles and how would the Lorenz curve change? President Biden wants to reverse the widening racial income...
-
Enstrom purchased an aircraft from the Interceptor Corporation. When the aircraft crashed due to a design defect, Enstrom sued Interceptor. However, when Enstrom found out that Interceptors assets...
-
Let the effective interest rate be 5% for the first 6 years and 4% for the next 4 years. Find the future value of the annuity-immediate at the end of the 10-year period with an annual payment of $100.
-
Nate prepares slides for his microscope. In 1 day he prepared 12 different slides. Which equation best represents y, the total number of slides Nate prepares in x days if he continues at this rate? A...
-
What are four errors team leaders might make when trying to give constructive feedback to team members?
-
To be considered effective as a manager, what goals will you set for yourself in the new job? What skills will be important to you, and why, as you seek success as the audit team supervisor?
-
Valeria Martinez has just been appointed manager of a production team operating the 11 p.m. to 7 a.m. shift in a large manufacturing firm. An experienced manager, Valeria is pleased that the team...
-
From the following trial balance of G. Foot after his first year's trading, you are required to draw up a statement of profit or loss for the year ending 30 June 2016. A statement of financial...
-
At the beginning of the financial year on 1 April 2017, a company had a balance on plant account of 372,000 and on provision for depreciation of plant account of 205,400. The company's policy is to...
-
(a) Distinguish between capital and revenue expenditure. (b) Drake Ltd took delivery of a computer network on 1 July 2016, the beginning of its financial year. The list price of the equipment was...
Study smarter with the SolutionInn App