Quiz 2- Ch3-4.docx

# Quiz 2- Ch3-4.docx - Question 1 4 out of 4 points Bazooka...

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Question 1 4 out of 4 points Bazooka Company is thinking about introducing a new type of color printer. If they introduce it, their factory will incur additional fixed costs of \$37,000,000 per year. The variable costs will be \$261 per printer. a) If Bazooka sells the new printer for \$819, how many must they sell to break even? b) If Bazooka sells 70,000 of the new printer at the \$819 price, what will the contribution to profit be? Selected Answer: B. 66,308 printers; \$2,060,000 profit Correct Answer: B. 66,308 printers; \$2,060,000 profit Response Feedback: a) 66,308 printers (Q BE = F/(SP - VC) = \$37,000,000/(\$819 - \$261) = 66,308) b) \$2,060,000 (Profit = total revenue - total cost = SP*A - [F+VC*Q] = \$819 * 70,000 - [\$37,000,000+ (\$261*70,000)] = \$2,060,000) AACSB: Reflective Thinking Bloom's: Application Learning Objective: Use break-even analysis as a tool in deciding between alternative products. Level: Medium Section Ref: The Product Design Process Question 2 4 out of 4 points What type of process is designed to produce a large volume of a standardized product for mass production, such as automobiles? Selected Answer: E. line processes Correct Answer: E. line processes Response Feedback: AACSB: Analytic Bloom's: Knowledge Learning Objective: Identify different types of processes and explain their characteristics.

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• Fall '17
• Chad Kennedy

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