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For questions 1 0 - 1 2 , refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual
For questions refer to the following problem:
A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $ The selling price is $ unit, and the variable cost is $unit
To break even; the annual production level for the company needs to be at
a units
b units
c units
d units
To make profit of $; the annual production level for the company needs to be at
a units
b units
c units
d units
If the company sets annual production at units, what must the selling price be to beak even. Assume annual fixed cost is still $ and unit varable cost is $ unit.
a $unit
b $unit
c $unit
d $ unit
For questions refer to the following problem:
A company is considering two options for production of a part needed in manufacturing process. Cost information for these two options is as follows:
tableALTERNATIVEFIXED COST,VARIABLE COSTSpecialPurpose Equipment,$ per year,$ per unitGeneralPurpose Equipment,$ per year,$ per unit
Using the above information, answer the following questions:
What is the break even quantity between the two options?
a units per year
b units per year
c units per year
d units per year
What are the total costs under the Specil Pupuse Rqupunent opion for an annual quantily of units?
a $
b$
c$
d SR
What are the total costs under the Constal Pupow Rumprient pption for an anual quantity of mits?
Si
b$
c$
d$
For what range of ouput is the spetwi Pupustequpment the low cost option?
a more thas units per year
b more than units per year
c unis per year
d unis per year
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