Homework_Solutions

Homework_Solutions - Total processing time by machine...

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Solutions Chapter 5 3. FC = $9200/month VC = $.70/unit Price = $.90/unit a. Q BEP = FC = $9,200 = 46,000 units Price – VC $.90 - $.70 b. Profit = Price * 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. Q = Specified profit + FC = $16,000 + 9,200/month = 126,000 units . Price – VC $.90/unit - $.70/unit d. Total Revenue = Price * Q, so Q = Total Revenue = $23,000 = 25,556 units R $.90/unit e. 1. 4. FC Rev VC A: $40,000 $15/unit $10/unit B: $30,000 $15/unit $11/unit a. units 000 , 8 unit / 10 $ unit / 15 $ 000 , 40 $ Q A , BEP = - = units 500 , 7 unit / 11 $ unit / 15 $ 000 , 30 $ Q B , BEP = - = b. Profit = Q(Price – VC) – FC [A’s Profit] [B’s Profit] Q($15 – $10) – $40,000 = Q($15 – $11) – $30,000 Solving, Q = 10,000 units 0 Volume (units) TR = $90,000 @ Q = 100,000 units TC = $79,200 @ Q = 100,000 units TR TC 100,000 $100,000 $50,000 $9,200 Cost
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c. P A = 12,000($15 – $10) – $40,000 = $20,000 [A is higher] P B = 12,000($15 – $11) – $30,000 = $18,000 10. a. Given: 10 hrs. or 600 min. of operating time per day. 250 days x 600 min. = 150,000 min. operating time per machine per year.
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Unformatted text preview: Total processing time by machine Product A B C 1 48,000 64,000 32,000 2 48,000 48,000 36,000 3 30,000 36,000 24,000 4 60,000 60,000 30,000 Total 186,000 208,000 122,000 machine 1 81 . 000 , 150 000 , 122 machine 2 38 . 1 000 , 150 000 , 208 machine 2 24 . 1 000 , 150 000 , 186 = = = = = = C B A N N N You would have to buy two A machines at a total cost of $80,000, or two B machines at a total cost of $60,000, or one C machine at $80,000. b. Total cost for machine A: 186,000 min 60 = 3,100 hrs. 3,100 hrs x $10 + $80,000 = $111,000 machine B: 208,000 60 = 3,466.67 hrs. 3,466.67 hrs. x $11 + $60,000 = $98,133 machine C: 122,000 60 = 2,033.33 hrs. 2,033.33 hrs. x $12 + $80,000 = $104,400 13. a. 11/hr. b. Increase capacity of operation 3 by about 10%. Beyond that, Operation 1 would become the limiting (bottleneck) operation....
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Homework_Solutions - Total processing time by machine...

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