Question: Often in manufacturing, operations managers learn that they can reduce their total costs of production if they invest in more automated equipment because automation can

Often in manufacturing, operations managers learn
Often in manufacturing, operations managers learn
Often in manufacturing, operations managers learn
Often in manufacturing, operations managers learn
Often in manufacturing, operations managers learn that they can reduce their total costs of production if they invest in more automated equipment because automation can reduce direct labor cost, even though it increases fixed costs initially. However, managers must determine if their anticipated demand for their products warrant the investment. In this scenario, an operations manager is interested in the total costs associated with three processes- - Process A, Process B, and Process C--for one product. The following table summarizes the fixed and variable costs per unit for the three processes. Use your knowledge of break-even analysis to answer the following three quiz questions. Fixed and Variable Costs for Processes Process A Process B Process C Fixed Cost ($) 10,000 50,000 80,000 Variable Cost per Unit ($) 15 5 2 Based upon the above scenario, for which range of output is Process B the best choice? a. O to less than 4000 units O b. 4,000 to less than 10,000 units O c. 10,000 and more units For the above scenario, if the production volume is 12,000 units, what is the best process choice? a. Process A b. Process B c. Process C For the above scenario, if the production volume is 10,000 units, what is the best process choice? [mark all correct answers) a. Process A b. Process B c. Process C

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