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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