Q.1

a.

A loan processing operation that processes an average of 6 loans per day. The operation has a design capacity of 15 loans per day and an effective capacity of 13 loans per day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Utilization %

Efficiency %

b.

A furnace repair team that services an average of 3 furnaces a day if the design capacity is 7 furnaces a day and the effective capacity is 6 furnaces a day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Utilization %

Efficiency %

This is not necessarily (True/False). If the design capacity is relatively (High/Low), the utilization could be (High/Low) even though the efficiency was (High/Low).

Q2.

In a job shop, effective capacity is only 59 percent of design capacity, and actual output is 50 percent of effective output. What design capacity would be needed to achieve an actual output of 10 jobs per week? (Round your answer to the nearest whole number.)

Design capacity jobs

Q3.

A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $8,860 per month and variable costs of 66 cents per unit produced. Each item is sold to retailers at a price that averages 88 cents.

a.

What volume per month is required in order to break even? (Round your answer to the nearest whole number.)

Volume per month units

b-1.

What profit would be realized on a monthly volume of 56,378 units? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Profit $

b-2.

What profit would be realized on a monthly volume of 84,448 units? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Profit $

c.

What volume is needed to obtain a profit of $15,456 per month? (Round your answer to the nearest whole number.)

Volume per month units

d.

What volume is needed to provide a revenue of $20,934 per month? (Round your answer to the nearest whole number.)

Volume per month units

Q4.

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $39,000 for A and $30,000 for B; variable costs per unit would be $10 for A and $11 for B; and revenue per unit would be $15.

a. Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.)

QBEP,A units

QBEP,B units

b. At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.)

Profit units

c. If expected annual demand is 16,000 units, which alternative would yield the higher profit?

Higher profit (A/B)

Q5.

A producer of felt-tip pens has received a forecast of demand of 34,000 pens for the coming month from its marketing department. Fixed costs of $30,000 per month are allocated to the felt-tip operation, and variable costs are 36 cents per pen.

a. Find the break-even quantity if pens sell for $3 each. (Round your answer to the next whole number.)

QBEP units

b. At what price must pens be sold to obtain a monthly profit of $25,000, assuming that estimated demand materializes? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price $

Q6.

value:

3.00 points

A real estate agent is considering changing her cell phone plan. There are three plans to choose from, all of which involve a monthly service charge of $30. Plan A has a cost of $0.42 a minute for daytime calls and $0.3 a minute for evening calls. Plan B has a charge of $0.57 a minute for daytime calls and $0.14 a minute for evening calls. Plan C has a flat rate of $92 with 200 minutes of calls allowed per month and a charge of $.40 per minute beyond that, day or evening.

a.

Determine the total charge under each plan for this case: 114 minutes of day calls and 49 minutes of evening calls in a month. (Round your answer to the nearest whole number. Omit the "$" sign in your response.)

Cost for Plan A $

Cost for Plan B $

Cost for Plan C $

c.

If the agent will use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round your answer to the nearest whole number.)

Plan A is optimal for zero to less than minutes. Plan C is optimal from minutes or more.

d.

Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of call minutes for daytime calls) would she be indifferent between plans A and B? (Round your answer to the nearest whole percent. Omit the "%" sign in your response.)

Point percent daytime minutes

Q7.

A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor at $7 each or to produce them in-house. Either of two processes could be used for in-house production; one would have an annual fixed cost of $179,144 and a variable cost of $5 per unit, and the other would have an annual fixed cost of $197,542 and a variable cost of $4 per unit. Determine the range of annual volume for which each of the alternatives would be best. (Round your answer to the nearest whole number.)

For annual volume less than , (Purchse from vendor/Production in house at 4$ per unit/Production in house at 5$ per unit) is best. For larger quantities, best to produce in house at $ per unit.

Q8.

A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two processes. One would entail a variable cost of $8 per unit and an annual fixed cost of $359,995; the other would entail a variable cost of $13 per unit and an annual fixed cost of $175,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per unit for any volume up to 32,500 units. Vendor B has a price of $17 per unit for demand of 1,000 units or less, and $14 per unit for larger quantities. Vendor C offers a price of $15 per unit for the first 1,500 units, and $15 per unit for additional units.

a.

If the manager anticipates an annual volume of 12,000 units, which alternative would be best from a cost standpoint? For 24,000 units, which alternative would be best? (Omit the "$" sign in your response.)

TC for 12,000 units TC for 24,000 units

Int. 1: $ Int. 1: $

Int. 2: $ Int. 2: $

Vend A $ Vend A $

Vend B $ Vend B $

Vend C $ Vend C $

is the best from a cost standpoint. (vend a/vend b/vend c/int 1/int2)

is the best from a cost standpoint. (vend a/vend b/vend c/int 1/int2)

Q9.

A company manufactures a product using two machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. At present, actual output averages 200 units per cell, but the manager estimates that productivity improvements soon will increase output to 221 units per day. Annual demand is currently 50,000 units. It is forecasted that within two years, annual demand will triple. How many cells should the company plan to produce to satisfy predicted demand under these conditions? Assume 242 workdays per year. (Round up your answer to the next whole number.)

Cells

Q10.

A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:

Machine Cost

A $ 45,489

B $ 25,643

C $ 84,250

Product forecasts and processing times on the machines are as follows:

PROCCESSING TIME PER UNIT (minutes)

Product Annual

Demand A B C

1 15,230 3 4 2

2 10,402 4 4 3

3 8,022 5 6 4

4 28,132 2 2 1

a.

Assume that only purchasing costs are being considered. Which machine would have the lowest total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year. (Round up your answers to the next whole number.)

Total processing time in minutes per machine:

A

B

C

b.

Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $11 each, B machines have an hourly operating cost of $10 each, and C machines have an hourly operating cost of $14 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying capacity processing requirements? (Round your answers to the nearest whole number.)

Total cost for each machine

A

B

C

Buy (1/2),(C/B/A) machines.

Q11.A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,000 per day, while two machines will result in a fixed cost of $3,800 per day. Variable costs will be $20 per customer, and revenue will be $45 per customer.

a. Determine the break-even point for each range. (Round your answers to the next whole number.)

One machine

Two machines

b.

If estimated demand is 90 to 120 customers per day, how many machines should be purchased?

Total number of machines purchased

a.

A loan processing operation that processes an average of 6 loans per day. The operation has a design capacity of 15 loans per day and an effective capacity of 13 loans per day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Utilization %

Efficiency %

b.

A furnace repair team that services an average of 3 furnaces a day if the design capacity is 7 furnaces a day and the effective capacity is 6 furnaces a day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Utilization %

Efficiency %

This is not necessarily (True/False). If the design capacity is relatively (High/Low), the utilization could be (High/Low) even though the efficiency was (High/Low).

Q2.

In a job shop, effective capacity is only 59 percent of design capacity, and actual output is 50 percent of effective output. What design capacity would be needed to achieve an actual output of 10 jobs per week? (Round your answer to the nearest whole number.)

Design capacity jobs

Q3.

A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $8,860 per month and variable costs of 66 cents per unit produced. Each item is sold to retailers at a price that averages 88 cents.

a.

What volume per month is required in order to break even? (Round your answer to the nearest whole number.)

Volume per month units

b-1.

What profit would be realized on a monthly volume of 56,378 units? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Profit $

b-2.

What profit would be realized on a monthly volume of 84,448 units? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Profit $

c.

What volume is needed to obtain a profit of $15,456 per month? (Round your answer to the nearest whole number.)

Volume per month units

d.

What volume is needed to provide a revenue of $20,934 per month? (Round your answer to the nearest whole number.)

Volume per month units

Q4.

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $39,000 for A and $30,000 for B; variable costs per unit would be $10 for A and $11 for B; and revenue per unit would be $15.

a. Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.)

QBEP,A units

QBEP,B units

b. At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.)

Profit units

c. If expected annual demand is 16,000 units, which alternative would yield the higher profit?

Higher profit (A/B)

Q5.

A producer of felt-tip pens has received a forecast of demand of 34,000 pens for the coming month from its marketing department. Fixed costs of $30,000 per month are allocated to the felt-tip operation, and variable costs are 36 cents per pen.

a. Find the break-even quantity if pens sell for $3 each. (Round your answer to the next whole number.)

QBEP units

b. At what price must pens be sold to obtain a monthly profit of $25,000, assuming that estimated demand materializes? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price $

Q6.

value:

3.00 points

A real estate agent is considering changing her cell phone plan. There are three plans to choose from, all of which involve a monthly service charge of $30. Plan A has a cost of $0.42 a minute for daytime calls and $0.3 a minute for evening calls. Plan B has a charge of $0.57 a minute for daytime calls and $0.14 a minute for evening calls. Plan C has a flat rate of $92 with 200 minutes of calls allowed per month and a charge of $.40 per minute beyond that, day or evening.

a.

Determine the total charge under each plan for this case: 114 minutes of day calls and 49 minutes of evening calls in a month. (Round your answer to the nearest whole number. Omit the "$" sign in your response.)

Cost for Plan A $

Cost for Plan B $

Cost for Plan C $

c.

If the agent will use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round your answer to the nearest whole number.)

Plan A is optimal for zero to less than minutes. Plan C is optimal from minutes or more.

d.

Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of call minutes for daytime calls) would she be indifferent between plans A and B? (Round your answer to the nearest whole percent. Omit the "%" sign in your response.)

Point percent daytime minutes

Q7.

A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor at $7 each or to produce them in-house. Either of two processes could be used for in-house production; one would have an annual fixed cost of $179,144 and a variable cost of $5 per unit, and the other would have an annual fixed cost of $197,542 and a variable cost of $4 per unit. Determine the range of annual volume for which each of the alternatives would be best. (Round your answer to the nearest whole number.)

For annual volume less than , (Purchse from vendor/Production in house at 4$ per unit/Production in house at 5$ per unit) is best. For larger quantities, best to produce in house at $ per unit.

Q8.

A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two processes. One would entail a variable cost of $8 per unit and an annual fixed cost of $359,995; the other would entail a variable cost of $13 per unit and an annual fixed cost of $175,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per unit for any volume up to 32,500 units. Vendor B has a price of $17 per unit for demand of 1,000 units or less, and $14 per unit for larger quantities. Vendor C offers a price of $15 per unit for the first 1,500 units, and $15 per unit for additional units.

a.

If the manager anticipates an annual volume of 12,000 units, which alternative would be best from a cost standpoint? For 24,000 units, which alternative would be best? (Omit the "$" sign in your response.)

TC for 12,000 units TC for 24,000 units

Int. 1: $ Int. 1: $

Int. 2: $ Int. 2: $

Vend A $ Vend A $

Vend B $ Vend B $

Vend C $ Vend C $

is the best from a cost standpoint. (vend a/vend b/vend c/int 1/int2)

is the best from a cost standpoint. (vend a/vend b/vend c/int 1/int2)

Q9.

A company manufactures a product using two machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. At present, actual output averages 200 units per cell, but the manager estimates that productivity improvements soon will increase output to 221 units per day. Annual demand is currently 50,000 units. It is forecasted that within two years, annual demand will triple. How many cells should the company plan to produce to satisfy predicted demand under these conditions? Assume 242 workdays per year. (Round up your answer to the next whole number.)

Cells

Q10.

A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:

Machine Cost

A $ 45,489

B $ 25,643

C $ 84,250

Product forecasts and processing times on the machines are as follows:

PROCCESSING TIME PER UNIT (minutes)

Product Annual

Demand A B C

1 15,230 3 4 2

2 10,402 4 4 3

3 8,022 5 6 4

4 28,132 2 2 1

a.

Assume that only purchasing costs are being considered. Which machine would have the lowest total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year. (Round up your answers to the next whole number.)

Total processing time in minutes per machine:

A

B

C

b.

Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $11 each, B machines have an hourly operating cost of $10 each, and C machines have an hourly operating cost of $14 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying capacity processing requirements? (Round your answers to the nearest whole number.)

Total cost for each machine

A

B

C

Buy (1/2),(C/B/A) machines.

Q11.A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,000 per day, while two machines will result in a fixed cost of $3,800 per day. Variable costs will be $20 per customer, and revenue will be $45 per customer.

a. Determine the break-even point for each range. (Round your answers to the next whole number.)

One machine

Two machines

b.

If estimated demand is 90 to 120 customers per day, how many machines should be purchased?

Total number of machines purchased

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