Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Old MathJax webview This means that the question has two marks ABC Company has two machines, each machine working separately, but theyproduce the same parts.

Old MathJax webview

image text in transcribed

image text in transcribed

This means that the question has two marks

ABC Company has two machines, each machine working separately, but theyproduce the same parts. The variable and fixed costs of those two machines aresummarized in the following table. Machine 1 (M1) cycle time is 1 part/ 3hours, and Machine 2 (M2) cycle time is 1 part/1 hour. The manager wants to invest in a new machine (M3), the new machine'sfixed cost is $15,000, the variable cost is $400 / 10 parts, and it needs two operators;its cycle time is one part / 1 hour. If he decided to buy the new machine, thepart price would increase by 30% Cost Fixed Cost Variable Cost (per 10 parts) Number of operators (50/hour) Part Price M1 M2 $20,000 $10,000 S500 $300 2 1 $500 6 How many parts does he need to sell to get a $10,000operating income * after buying machine 3 2 (2 ) 7 Based on your answer, which option * ?should he choose

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Finance An Introduction

Authors: Eddie McLaney, Peter Atrill

10th Edition

1292312262, 978-1292312262

More Books

Students also viewed these Accounting questions

Question

Does it avoid typos and grammatical errors?

Answered: 1 week ago