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NAME QBEP = FC R-v BUSI 3321-OPERATIONS MANAGEMENT HOMEWORK 1 (CH 1-6) - SPRING 2024 ID IN-CLASS# Profit (P) TR-TC = RxQ-(FC +vx Q)
NAME QBEP = FC R-v BUSI 3321-OPERATIONS MANAGEMENT HOMEWORK 1 (CH 1-6) - SPRING 2024 ID IN-CLASS# Profit (P) TR-TC = RxQ-(FC +vx Q) = Q(R-v) - FC A firm is considering three capacity alternatives: A, B, and C. Alternative A would have an annual fixed cost of $100,000 and variable costs of $22 per unit. Alternative B would have annual fixed costs of $120,000 and variable costs of $20 per unit. Alternative C would have fixed costs of $80,000 and variable costs of $30 unit. (A) Which alternative has the lowest break-even quantity? Revenue is per expected to be $50 per unit. (B) Which alternative will produce the highest profits for an annual output of 10,000 units? (C) Which alternative would require the lowest volume of output to generate an annual profit of $50,000? (D) Which alternative should I choose for a quantity of 25,000 units? (HINT: THERE ARE 2 INDIFFERENCE POINTS)
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