Chapter $4$ Practice Questions

Gordy Enterprises is evaluating three options for a new production process for their product "Solaron." The costs associated with each process option vary as shown in the table below. Jordy, CEO of Gordy Enterprises, believes he can sell each unit of Solaron for $$125.$

$\backslash$table$[[,$Process Options$],[,$A$,$B$,$C$],[$Equipment Cost $($$$),40,100,24,500,110,500],[$Labor and Material Cost$/$Unit $($$$),60,75,40]]$

a$.$ What is the break$-$even volume if the company selects process A for production?

b$.$ For a forecasted volume of $4000$ units, which process is the best?