Exam_1makeup - IE 343 Fall 2009 Name Student ID IE 343...

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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 1 IE 343 Midterm 1 Make-up exam Closed Book, Closed Notes Show all of your work . Your work and answers must be shown on the pages provided. Write your name and student ID in the spaces provided above. For problems 3 and 4, note that no interest tables are required; you are to carry your answer to the point where the equation for each problem is specified –e.g., “1,000(A/P, 10%, 5)+1,500+200(A/F, 10%, 5)” and stop here. Your grade on this problem will be based on the correctness of the equation and the clarity of your work leading up to the equation. For problems 2, 5 and 6 , interest tables are required and provided for you to perform your calculations.
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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 2 1. A computer chip manufacturing firm leases a building for $95,000 per year to manufacture the chips. The firm also pays for the machinery in the building in installments of $25,000 per year. Each chip costs $20 in labor and $15 in parts. The price of the chip in the market is $50. a) What is the breakeven level of the firm? 5 points Total fixed cost = 95,000 + 25,000 = 120,000 Total variable cost = 20 + 15 = 35 TC = 120,000 + 35D TR = 50D Breakeven occurs at TR = TC 50D = 120,000 + 35D D = 8000 b) If the firm decides to lower the price of the chip to $40, how many chips per year must the firm sell to earn a profit of $50,000 per year? 6 points Find D such that Π = 50,000.
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