5. (20 points) The Boychuk and Brommer Corporation (BBC) makes aluminum castings in its high-pressure aluminum casting plant in Memphis. BBC has a pending contract to produce aluminum engine block casings for Evinrude outboard motors. Evinrude motors is a division of Bombardier a global leader in the transportation industry, creating innovative and game-changing planes and trains. Evinrude Outboard Motors is an American company that builds a major brand of outboard motors for boats. Founded by Ole Evinrude in Milwaukee, Wisconsin in 1907, it was formerly owned by the publicly traded Outboard Marine Corporation (OMC) since 1935, but OMC filed for bankruptcy in 2000. Evinrude Outboard Motors was a North American company that built outboard motors boats. It is working as a subsidiary of Canadian Multinational Bombardier Recreational Products, but there is talk that the division will be discontinued. Thus, BBC must decide whether or not to contract with Evinrude to produce the aluminum castings. You are asked to perform a Break-Even-Analysis to determine the minimum order that BBC will accept. Fixed cost to product the engine blocks is $400,000 and the variable cost per unit is $150. Your contract with Evinrude is for them to pay $250 per block (unit). What is the minimum size order in units (number of engine blocks) and dollars to make this a financially viable contract? Quantity break-even point: QBE = Sales break-even point: SBE = 5. (20 points) The Boychuk and Brommer Corporation (BBC) makes aluminum castings in its high-pressure aluminum casting plant in Memphis. BBC has a pending contract to produce aluminum engine block casings for Evinrude outboard motors. Evinrude motors is a division of Bombardier a global leader in the transportation industry, creating innovative and game-changing planes and trains. Evinrude Outboard Motors is an American company that builds a major brand of outboard motors for boats. Founded by Ole Evinrude in Milwaukee, Wisconsin in 1907, it was formerly owned by the publicly traded Outboard Marine Corporation (OMC) since 1935, but OMC filed for bankruptcy in 2000. Evinrude Outboard Motors was a North American company that built outboard motors boats. It is working as a subsidiary of Canadian Multinational Bombardier Recreational Products, but there is talk that the division will be discontinued. Thus, BBC must decide whether or not to contract with Evinrude to produce the aluminum castings. You are asked to perform a Break-Even-Analysis to determine the minimum order that BBC will accept. Fixed cost to product the engine blocks is $400,000 and the variable cost per unit is $150. Your contract with Evinrude is for them to pay $250 per block (unit). What is the minimum size order in units (number of engine blocks) and dollars to make this a financially viable contract? Quantity break-even point: QBE = Sales break-even point: SBE =
