7.11 Nagle Electric, Inc., of Lincoln, Nebraska, must replace a robotic MIG welder and is evaluating two
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• • 7.11 Nagle Electric, Inc., of Lincoln, Nebraska, must replace a robotic MIG welder and is evaluating two alternatives. Machine A has a fixed cost for the first year of $75,000 and a variable cost of
$16, with a capacity of 18,000 units per year. Machine B is slower, with a speed of one-half of A’s, but the fixed cost is only $60,000. The variable cost will be higher, at $20 per unit. Each unit is expected to sell for $28.
a) What is the crossover point (point of indifference) in units for the two machines?
b) What is the range of units for which machine A is preferable?
c) What is the range of units for which machine B is preferable?
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Related Book For
Operations Management: Sustainability And Supply Chain Management
ISBN: 9780135225899,9780135202722
13th Edition
Authors: Jay Heizer; Barry Render; Chuck Munson
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