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MSB Homework3 Answer - break-even point associated with two...

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Solution for homework #3 Solutions 1. a. b. c. This is not necessarily true. If the design capacity is relatively high, the utilization could be low even though the efficiency was high. 11. a. R = \$45 per customer, VC = \$20 per customer FC Range One machine \$2,000 1 to 100 80 = 2000 / (45 – 20) Two machines 3,800 101 to 200 152 = 3800 / (45 – 20) b. Since BEP for 1 machine is 82 and 82 < 90 and BEP for 2 machines is 152 > 120, we should purchase 1 machine, because even at the upper limit (120) we have not reached the

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Unformatted text preview: break-even point associated with two machines. 12. R = \$5.95, VC = \$3. One line would have a fixed cost of \$20 (6,000 Ã· 300) per hour and two lines would have a fixed cost of \$35 (10,500 Ã· 300) per hour. Volume No. of lines Profit 14 1 \$21.30 = 14 (5.95 â€“ 3) â€“ 20 15 1 24.25 = 15 (5.95 â€“ 3) â€“ 20 16 2 12.20 = 16 (5.95 â€“ 3) â€“ 35 17 2 15.15 = 17 (5.95 â€“ 3) â€“ 35 18 2 18.10 = 18 (5.95 â€“ 3) â€“ 35 Choose one line . Assumption: Little or negligible cost of manufacturing....
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MSB Homework3 Answer - break-even point associated with two...

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