Question: OPERATIONS HOMEWORK PROBLEMS 3. The Clutch Engineering Company is proposing to locate a branch office in one of two West Coast locations, A or B.

OPERATIONS HOMEWORK PROBLEMS 3. The Clutch Engineering Company is proposing to locate a branch office in one of two West Coast locations, A or B. These two sites have quite different estimated operating costs: A B $16/hr. $15/hr. Engineering labor cost Materials and supplies 2.40/hr. $1.80/hr. . (tied to engineering hours) . Variable overhead 5.50/hr. 4.40/hr. . Total annual fixed cost $150,000 $190,000 Price to customers. $30 $30 Consider the hourly costs to be variable costs. a. Compute the break-even for both locations. . b. At what level of output (number of hours) are you in- different to the location? 46

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