11. Two processes are put in place for production. Neither will be removed.

Process R is designed to produce 10,000 units per year and has a fi xed cost of $90,000 per year. Process T has the same design capacity and has a fi xed cost of $80,000 per year. Process R produces the initial 4,000 units at a variable cost of $8 per unit and the next 6,000 units at a variable cost of $17 per unit. Process T produces the fi rst 5,000 units at a variable cost of $9 each and produces the next 5,000 at $5 each. Assume that the fi xed costs are incurred even if no production is assigned to the process.

a. What should be the loads assigned to Processes R and T if demand for the product is 5,500 units?

b. What is the total cost and average cost per unit for Part a?

c. What should be the loads assigned to Processes R and T if demand for the product is 9,500 units?

d. What is the total cost and average cost per unit for Part c?