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# ORIE_350_Homework__8_answers_draft - ORIE 3150 Homework#8...

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ORIE 3150 Homework #8 Fall 2008 1. Depregno Industries is making a labor intensive industrial filter product. They found the second unit cost \$30,000 in labor. The fourth unit had a labor cost of \$26,100. Given that learning is taking place, find the expected labor cost for the: a. 7 th unit b. 11 th unit s = 26100/30000 = 0.87 n = (log s)/(log 2) = (log 0.87)/(log 2) = -0.200913 Z u = Ku n K = (30000)(2) 0.200913 = \$34,483 Z 7 = (34483)(7) -0200913 = \$23,324 cost for 7 th unit Z 11 = (34483)(11) -0200913 = \$21,300 cost for 11 th unit 2. A contractor manufactures small backup power systems. Learning is taking place. Given the following data, estimate the cost of unit #6 and unit #10. Unit 1: \$46,346 Unit 2: \$38,941 Unit 3: \$32,611 Unit 4: \$31,929 Unit 5: \$28,645 u Z Log u Log Z 1 46346 0 4.666012 2 38941 0.30103 4.590407 3 32611 0.477121 4.513364 4 31929 0.60206 4.504185 5 28645 0.69897 4.457049 slope -0.29529 n intercept 4.668997 46666 K Z 6 = Ku n = (46666)(6) -0.29529 = \$27,493 Z 10 = Ku n = (46666)(10) -0.29529 = \$23,643

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3. Johnson Manufacturing has the following data from its factory, collected on a monthly basis over the past eight months. . Production (Units) Cost of Goods Sold (\$) 1184 480,000 570 354,000 681 369,000 1288 539,000 887 398,000 795 427,000 978 444,000 1089 483,000 a) Using linear regression, find the fixed cost per month and the variable cost per unit for the factory. Fixed cost = \$209,778 per month, variable cost per unit = \$243 per unit. b) Using linear regression, predict the cost of goods sold on a per unit basis for a month in which 1400 units were manufactured. Total cost = 209778 + (1400)(243) = \$549,993.05 (without rounding) Unit cost = \$549,993.05/1400 = \$392.85
4. Topper Golf makes practice putting greens for home use. They have three models, the Par, Birdie and Eagle. The putting greens consist of an artificial grass carpet covering an undulating surface, in a framed circular area about 15 feet in diameter. As such, these practice greens are quite large and rather expensive. Last year, sales were as follows: Par Birdie Eagle Sales (units) 140 160 70 Sales (\$) \$168,000 \$288,000 \$280,000 Variable costs (per unit) Manufacturing 300 400 600 Selling 100 100 100 Fixed costs (total) Manufacturing\$120,000, Selling, Admin.\$180,000 a) If the product mix is constant, find the breakeven point in units of each model. b) Find the sales dollars needed to breakeven. Par Birdie Eagle Sales (units) 140 160 70 Sales (\$) \$168,000 \$288,000 \$280,000 Variable costs (per unit) Manufacturing 300 400 600 Selling 100 100 100 Fixed costs (total) Manufacturing \$120,000 Selling, Admin. \$180,000 a) Basket Par 14 400 5600 Birdie 16 500 8000 Eagle 7 700 4900 18500 Par 14 \$1,200 16800 Birdie 16 \$1,800 28800 Eagle 7 \$4,000 28000 73600 Fixed \$300,000 X(B) 5.444646 Par 14 76.22505 77 Birdie 16 87.11434 88 Eagle 7 38.11252 39 b) Sales dollars Par 77 \$1,200 \$92,400 Birdie 88 \$1,800 \$158,400 Eagle 39 \$4,000 \$156,000 \$406,800 Unrounded answer is \$400,725.95 …either one is fine.

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5. SuperPitch makes 3 kinds of pitching machines for baseball practice.
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