Question
Meile MachineShop, Inc., has a1-year contract for the production of 200,000 gear housings for a newoff-road vehicle. Owner Larry Meile hopes the contract will be
Meile MachineShop, Inc., has a1-year contract for the production of 200,000 gear housings for a newoff-road vehicle. Owner Larry Meile hopes the contract will be extended and the volume increased next year. Meile has developed costs for three alternatives. They aregeneral-purpose equipment(GPE), flexible manufacturing system (FMS)LOADING...
, andexpensive, butthe efficient, dedicated machine(DM). The cost datafollow:
General-Purpose Equipment(GPE)
Flexible Manufacturing System(FMS)
Dedicated Machine(DM)
Annual contracted units
200,000
200,000
200,000
Annual fixed cost
$150,000
$250,000
$500,000
Per unit variable cost
$15.00
$14.00
$13.75
Based on thecost, the process that is best suited for the current contracted volume is
Meile MachineShop, Inc., has a1-year contract for the production of 200,000 gear housings for a newoff-road vehicle. Owner Larry Meile hopes the contract will be extended and the volume increased next year. Meile has developed costs for three alternatives. They aregeneral-purpose equipment(GPE), flexible manufacturing system (FMS)LOADING...
, andexpensive, butefficient, dedicated machine(DM). The cost datafollow:
General-Purpose Equipment(GPE)
Flexible Manufacturing System(FMS)
Dedicated Machine(DM)
Annual contracted units
200,000
200,000
200,000
Annual fixed cost
$100,000
$225,000
$525,000
Per unit variable cost
$15.00
$14.75
$13.50
The option GPE is best when the contracted volume is below
nothing
units (enter your response as a wholenumber).
Meile MachineShop, Inc., has a1-year contract for the production of 75,000 gear housings for a newoff-road vehicle. Owner Larry Meile hopes the contract will be extended and the volume increased next year. Meile has developed costs for three alternatives. They aregeneral-purpose equipment(GPE), flexible manufacturing system (FMS)LOADING...
, andexpensive, butefficient, dedicated machine(DM). The cost datafollow:
General-Purpose Equipment(GPE)
Flexible Manufacturing System(FMS)
Dedicated Machine(DM)
Annual contracted units
75,000
75,000
75,000
Annual fixed cost
$125,000
$200,000
$525,000
Per unit variable cost
$18.00
$14.50
$13.50
Based on the totalcost, the process that is best suited for the current contracted volume is
NagleElectric, Inc., ofLincoln, Nebraska, must replace a robotic Mig welder and is evaluating two alternatives. Machine A has a fixed cost for the first year of $74,000 and a variable cost of $19, with a capacity of 14,000 units per year. Machine B isslower, with a speed ofone-half ofA's, but the fixed cost is only $65,000. The variable cost will behigher, at $23 per unit. Each unit is expected to sell for $31.
a) What is the crossover point(point ofindifference) for the twomachines?
The crossover point for the two machines is
nothing
units. (Round your response to the nearest wholenumber.)
Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $65,000, and for proposalB, $34,000. The variable cost for A is $10, and forB, $14. The revenue generated by each unit is $18.
a) What is the crossover point for the twooptions?
The crossover point for the two options is
nothing
units. (Round your response to the nearest wholenumber.)
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Ethics Theory and Contemporary Issues
Authors: Barbara MacKinnon, Andrew Fiala
8th edition
9781305162846, 1285196759, 1305162846, 978-1285196756
