Help with the green highlighted ones ? 7.1, 7.2 , 7.5, and 7.8

7.1 Borges Machine Shop, Inc., has a 1-year contract tions, materials and labor will be $0.70 per board. If it buys new for the production of 200,000 gear housings for a new off-road equipment, variable costs are estimated to be S0.40 per board. vehicle. Owner Luis Borges hopes the contract will be extended a) Graph the three total cost lines on the same chart. and the volume increased next year. Borges has developed costs b) Which alternative should Ski Boards, Inc., choose if it thinks it for three alternatives. They are general-purpose equipment can sell more than 3,000 boards? (GPE), flexible manufacturing system (FMS), and expensive, but c) Which alternative should the firm use if it thinks the market efficient, dedicated machine (DM). The cost data follow: for boards will be between 1,000 and 2,000? PX GENERAL .. 7.7 Tim Urban, owner/manager of Urban's Motor Court PURPOSE FLEXIBLE DEDICATED in Key West, is considering outsourcing the daily room cleanup EQUIPMENT MANUFACTURING MACHINE (GPE) SYSTEM (FMS) (DM) for his motel to Duffy's Maid Service. Tim rents an average of Annual contracted 200,000 200,000 200,000 50 rooms for each of 365 nights (365 x 50 equals the total rooms units rented for the year). Tim's cost to clean a room is $12.50. The Annual fixed cost $100,000 $200,000 $500,000 Duffy's Maid Service quote is $18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motel's Per unit variable cost $ 15.00 $14.00 $ 13.00 name. Tim's annual fixed cost for space, equipment, and supplies Which process is best for this contract? PX is $61,000. Which is the preferred process for Tim, and why? PX 7.8 Matthew Bailey, as manager of Designs by Bailey, 7.2 Using the data in Problem 7.1, determine the most is upgrading his CAD software. The high-performance (HP) conomical volume for each process. PX software rents for $3,000 per month per workstation. The 7.3 Using the data in Problem 7.1, determine the best pro- Standard-performance (SP) software rents for $2,000 per month cess for each of the following volumes: (1) 75,000, (2) 275,000, per workstation. The productivity figures that he has available and (3) 375,000. suggest that the HP software is faster for his kind of design. 7.4 Refer to Problem 7.1. If a contract for the second Therefore, with the HP software he will need five engineers and with the SP software he will need six. This translates into a vari and third years is pending, what are the implications for process able cost of $200 per drawing for the HP system and $240 per election? drawing for the SP system. At his projected volume of 80 draw- Stan Fawcett's company is considering producing a ings per month, which system should he rent? PX pear assembly that it now purchases from Salt Lake Supply, Inc. ... 7.9 Metters Cabinets, Inc., needs to choose a production Salt Lake Supply charges $4 per unit, with a minimum order of method for its new office shelf, the Maxistand. To help accomplish 3,000 units. Stan estimates that it will cost $15,000 to set up the this, the firm has gathered the following production cost data: process and then $1.82 per unit for labor and materials. Draw a graph illustrating the crossover (or indifference) point. ANNUALIZED VARIABLE COSTS (PER UNIT) (5) FIXED COST b) Determine the number of units where either choice has the OF PLANT & same cost. PX PROCESS TYPE EQUIP LABOR MATERIAL ENERGY 7.5