Question 1: An Industrial Production Company considers adding to its product lines a new gadget similar...
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Question 1: An Industrial Production Company considers adding to its product lines a new "gadget" similar to one they used to produce 10 years ago, but much larger. The Manager collects the following data on which to base his/her decision: • Size of the "gadget" will be double the size of the one they produced 10 years ago • The Power Sizing Factor for this kind of "gadgets" is 0.62 • The production cost for the "gadget" 10 years ago was $ 300 per unit • The price they were able to sell the "gadget" 10 years ago was $ 600 per unit • The Cost Index for the gadget 10 years ago was 160, it is now 220 • To expand production, the Company will need to rent additional space at a cost of $5,500 per month Before deciding on the implementation, the Manager wants to know how many units they must produce and sell for breaking-even. Hint: (1) assume the Power Sizing Factor and Cost Indexes apply to both production cost and selling price; (2) proceed by calculating the unit production cost and selling price for the larger "gadget" now; (3) build the break-even graph in excel Question 2: The production time needed to produce the first unit of a certain "gadget" is T₁ = 50 hrs, and the Learning Curve Rate of such production, as measured by the Production Manager, is 67%. Build the curve of Unit Production Time for units from 1 to 20 Question 1: An Industrial Production Company considers adding to its product lines a new "gadget" similar to one they used to produce 10 years ago, but much larger. The Manager collects the following data on which to base his/her decision: • Size of the "gadget" will be double the size of the one they produced 10 years ago • The Power Sizing Factor for this kind of "gadgets" is 0.62 • The production cost for the "gadget" 10 years ago was $ 300 per unit • The price they were able to sell the "gadget" 10 years ago was $ 600 per unit • The Cost Index for the gadget 10 years ago was 160, it is now 220 • To expand production, the Company will need to rent additional space at a cost of $5,500 per month Before deciding on the implementation, the Manager wants to know how many units they must produce and sell for breaking-even. Hint: (1) assume the Power Sizing Factor and Cost Indexes apply to both production cost and selling price; (2) proceed by calculating the unit production cost and selling price for the larger "gadget" now; (3) build the break-even graph in excel Question 2: The production time needed to produce the first unit of a certain "gadget" is T₁ = 50 hrs, and the Learning Curve Rate of such production, as measured by the Production Manager, is 67%. Build the curve of Unit Production Time for units from 1 to 20
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Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
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