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A manager is deciding between three machines for production of a new product. Each machine has fixed and variable costs listed below. Use this information
A manager is deciding between three machines for production of a new product. Each machine has fixed and variable costs listed below. Use this information to answer questions 1-2. Machine Y Z Fixed Cost 550,000 400,000 250.000 Variable Cost/Unit 15 20 25 Max Capacity 25,000 20,000 10,000 1. What is the breakeven point for each machine if revenue per unit is $40? (3 points) BEPx = Answer: BEPY = Answer: BEPz= Answer: Answer: 2. Given the BEPs you just calculated and the data in the above chart, which (if any) machine would you select if demand was expected to range between 19,000 and 22,000 for the next 3 (3) years and grow slightly after that? Provide rationale in ONE brief sentence. (1 point) Rationale: Another manager wants to evaluate an internal process that would be used to produce the new product. The fixed and variable costs and capacities for each process are listed below. Utilize this information to answer questions 3-4. Process Fixed Cost 130,000 90,000 60,000 Variable Cost/Unit 20 40 70 Capacity 15,000 10,000 900 B 3. What are the low-cost output ranges for each alternative given the cost info and capacity info above? (show ALL pertinent math and relevant ranges below (on both the 0-0 continuum and in table). (10 pts) 0 Math Area: Process Range Answer 0 - Answer: 1. If demand was expected to range between 1,500 and 8,000 for the next 5 years, which process would you select? Explain in one sentence. (1 pt) Explanation
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