PROBLEM I (Break-even Analysis ): A company can sell a product for $470.00 per unit. It has two options for making the product. Option A: A standard machine costs $167,400.00. Further, the variable cost is $160.00 per unit on the standard machine. Option B: An advanced machine costs $322,000.00. The variable cost is $120.00 per unit on the advanced machine. (Note that each option represents a straight line equation on the graph.) Answer the following questions. (1) What is the break-even point for option A? (a) 540 (b) 690 (c) 920 (d) 1290 (e) none of the above (2) What is the break-even point for option B? (a) 540 (b) 690 (c) 920 (d) 1290 (e) none of the above (3) At what volume will the profit be same for both options? (a) 3142 6) 3865 (c) 3294 (d) 3082 (e) none of the above (4) What must be the volume of sales to make a profit of $51,150 under option A? (a) 740 (b) 720 (c) 770 (d) 705 (e) none of the above (5) What must be the volume of sales to make a profit of $50,400 under option B? (a) 1042 (b) 1068 (c) 1064 (d) 1072 (e) none of the above (6) If the company can sell only 760 units of the product, what is the maximum profit the company can make? (a) -56,000 (b) 65,060 (c) 68,200 (d) 67,400 (e) none of the above (7) If the company can sell only 1800 units of the product, what is the maximum profit the company can make? (a) $308,000 (b) $366,400 (c) $346,800 (d) $390,600 (e) none of the above PROBLEM II (Make-buy Analysis): A company consumes a product in its manufacturing operations. It can buy the product from outside or make it in its own factory. Buy option: It can buy the product for $160.00 per unit (including all materials) from another company. There is no other cost involved in buying the product. Make-option 1: It can make the product at a (variable) cost of $90.00 per unit (including all materials) on a standard machine. Further, the standard machine costs S47,600.00. Make-option 2: It can make the product at a (variable) cost of $50.00 per unit (including all materials) on an advanced machine. Further, the advanced machine costs S127,600.00. Each option represents a straight line equation on the graph. Find the switch-over points (i.e., points of intersection) from the buy-option to make-option 1 and from make-option 1 to make-option 2. Answer the following questions. (8) The switch-over point (i.e., point of intersection from buy-option to make-option 1 is: (a) 610 (b) 680 (c) 980 (d) 1160 (e) none of the above (9) The switch-over point i.e., point of intersection) from make-option 1 to make-option 2 is: (a) 640 (b) 1680 (c) 1160 (d) 2000 (e) none of the above (10) If the company needs only 1020 units of the product, which option should be selected ? (a) Buy-option (b) Make-option 1 (c) Make-option 2