Question

Part Two - 65 Points 8. Bazooka Company is thinking about introducing a new type of color printer. If they introduce it, their factory will incur additional fixed costs of $37,000,000 per year. The variable costs will be $261 per printer. a. If Bazooka sells the new printer for $819, how many must they sell to break even? b. If Bazooka sells 70,000 of the new printer at the $819 price, what will the contribution to profit be? 9. Sam Smear owns a manufacturing company that makes ball point pens. Currently he is trying to decide between two processes for making the pens. The first process will have a fixed cost of $200,000 per year and variable costs of $0.40 per pen. The second process will have a fixed cost of $250,000 per year and variable costs of $0.30 per pen. a. Identify which ranges of product volume are best for each process. b. If Sam makes 200,000 pens, which process provides a lower cost? 10. Will's omelet factory produces 2,500 omelets a day. They've determined that their daily fixed costs are $4,000 with a variable cost of fifteen cents per omelet. a. (a) What is the total cost to make a day's omelets, and b. (b) what should Will charge for each omelet to make a 10% profit, rounded to the next whole dollar? 11. Simuelson Industries can produce its own motors for a $60,000 fixed monthly cost and a $50 variable cost per unit. Alternatively, Simuelson Industries can purchase the motors from an outside supplier for $50,000 per month and $58 per unit. a. What is the indifference point? b. What option should be chosen if monthly demand is 1200 units?7. Robert produces 300 units of a product per hour and 30 units are needed to ll a container. It takes 15 minutes to receive the materials needed from the previous workstation. The company currently uses a safety stock of 10 percent. Determine the number of kanb ans needed between Robert's station and the pre- vious process. 8. Consider the information from Problem 7. Determine how the number of kanbans and the inventory level will be affected if the time required for Robert to re- ceive the material increases to 30 minutes. 9. Consider the information from Problem 7. Determine how the number of kanbans and the inventory level will be affected if: (a) The container size is decreased to 15 units. (b) The container size is increased to 40 units. (c) The safety stock is increased to 20 percent. Market for Loanable Funds 20- 19- 18- S1 17- 16- 15- 14- 13- 1- Real interest rate A D1 20 40 60 80 100 Loanable funds ($ billions per year)