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Hw4 sol - HOMEWORK_4 SOLUTIONS Utilizatio n Efficiency b 1...

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HOMEWORK_4 SOLUTIONS 1. a. % 70 10 7 capacity Design output Actual n Utilizatio % 5 . 87 8 7 capacity Effective output Actual Efficiency b. % 67 6 4 capacity Design output Actual n Utilizatio % 80 5 4 capacity Effective output Actual Efficiency c. This is not necessarily true. If the design capacity is relatively high, the utilization could be low even though the efficiency was high. 2. % 80 capacity Effective output Actual Efficiency Actual output = .8 (Effective capacity) Effective capacity = .5 (Design capacity) Actual output = (.5)(.8)( Design capacity) Actual output = (.4)(Design capacity) Actual output = 8 jobs Utilization = .4 capacity Design output Actual n Utilizatio jobs 20 4 . 8 capacity Effective output Actual Capacity Design 3. FC = \$9,200/month VC = \$ .70/unit Rev = \$ .90/unit a. units 000 , 46 70 \$. 90 \$. 200 , 9 \$ VC Rev FC Q BEP b. Profit = Rev x Q (FC + VC x Q) 1. P 61,000 = \$.90(61,000) [\$9,200 + \$.70(61,000)] = \$3,000 2. P 87,000 = \$.90(87,000) [\$9,200 + \$.70(87,000)] = \$8,200 c.

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