Op Man HW 3 Chapters 6 & 7

Problem 7 11 aldo redondo driv es his own c ar on c

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Unformatted text preview: num ber.) Break ev en point 8,800 miles Worksheet Problem 7­11 Learning Objective: 07­02 Explain how manufacturing processes are organized. Problem 7-11 Aldo Redondo driv es his own c ar on c ompany bus ines s . His employ er reimburs es him for s uc h trav el at the rate of 42 c ents per mile. Aldo es timates that his fix ed c os ts per y ear s uc h as tax es , ins uranc e, and deprec iation are $2,200. The direc t or v ariable c os ts s uc h as gas , oil, and maintenanc e av erage about 17.0 c ents per mile. How many miles mus t he driv e to break ev en? (Do not round interm ediate calculations. Roundup your answer to the next whole num ber.) Break ev en point 8,800 ± 1 miles Explanation: The break ev en point is where total c os t equals total reimburs ement. Total c os ts inc lude the fix ed c os t (FC) plus the v ariable c os t (VC) times the number of miles driv en (Q). Total reimburs ement equals the per mile reimburs ement (R) times the number of miles driv en (Q). Solv e for the...
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This note was uploaded on 01/29/2014 for the course MAN 4504 taught by Professor Georgekyparisis during the Fall '09 term at FIU.

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