Question A

An alternative under consideration by a company will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit. The break-even point level of output is 500 units. {Note: Break-Even Output=Fixed Cost/(Price-Average Variable Cost}

Select one:

True

False

Question B

A department works one 7-hour shift and works 250 days per year. A new product is being introduced that requires 7,000 hours of processing time annually. The number of machines required is 4.

Select one:

True

False

Question C

In the EOQ model with planned shortages, if annual demand is 500, holding cost is $200, ordering cost is $15, and back-order cost is $400, EOQ (rounded to the next whole number) is:

Select one:

a. 8

b. 16

c. 112

d. 9

e. 11