4B Group 2.pdf - Seminar 4B Group 2 Jeanette Koh Ng Lei Wei...

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Seminar 4BGroup 2Jeanette Koh, Ng Lei Wei, Ng Ling ShanSeo Ka Chih, Yu Siew Ann, Zhao Qing
9-22Vista Company manufactures electronic equipment. It currently purchases from an outside supplier the special switches used in each of its products. The supplier charges Vista $2 per switch. Vista’s CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches.The projected data are as follows:Machine AMachine BAnnual fixed cost$135,000$204,000Variable cost per switch$0.65$0.30
9-22 Q1For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost?Machine AMachine BAnnual fixed cost$135,000$204,000Variable cost per switch$0.65$0.30
9-22 Q2What volume level would produce the same total costs regardless of the machine purchased?Machine AMachine BAnnual fixed cost$135,000$204,000Variable cost per switch$0.65$0.30
9-22 Q3What is the most profitable alternative for producing 200,000 switches per year?Annual fixed cost$135,000$204,000Variable cost per switch$0.65$0.30
Machine AMachine B

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