Exercise 5.1 Exercise 5.2 Given the following information, what would efficiency be? Given the following information, what would utilization be? Effective capacity = 80 units per day Design capacity = 100 units per day Utilization = 28 percent Effective capacity = 90 units per day Design capacity = 150 units per day Actual output = 90 units per day Exercise 5.3 Exercise 5.4 A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows: Number of Machines The owner of Old-Fashioned Berry Pies, S. Simon, is contemplating adding a new line of pies, which will require leasing new equipment for a monthly payment of $6,000. Variable costs would be $2 per pie, and pies would retail for $7 each. A. How many pies must be sold in order to break even? B. What would the profit (loss) be if 1,000 pies are made and sold in a month? C. How many pies must be sold to realize a profit of $4,000? D. If 2,000 can be sold, and a profit target is $5,000, what price should be charged per Total Annual Fixed Costs $ 9,600 15,000 20,000 Corresponding Range of Output O to 300 301 to 600 601 to 900 1 2 3 Variable cost is $10 per unit, and revenue is $40 per unit. pie? 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