At what volume of output would the two locations

Assignment Help Operation Management
Reference no: EM13917573

A small producer of machine tools wants to move to a larger building, and has identified two alternatives. Location A has annual fixed costs of $ 800,000 and variable costs of $ 14,000 per unit; location B has annual fixed costs of $ 920,000 and variable costs of $ 13,000 per unit. The finished items sell for $ 17,000 each.
a. At what volume of output would the two locations have the same total cost?
b. For what range of output would location A be superior? For what range would B be superior?

Reference no: EM13917573

Questions Cloud

Assuming the current market price of the stock reflects : The stock of Nogro Corporation is currently selling for $30 per share. Earnings per share in the coming year are expected to be $6. The company has a policy of paying out 40% of its earnings each year in dividends. Assuming the current market price o..
Semi-annual coupon bond outstanding : The Corner Grocer has a 7-year, 6 percent semi-annual coupon bond outstanding with a $1,000 par value. The bond has a yield to maturity of 5.5 percent. Show mathematically what happens if the market yield suddenly increases to 7 percent. Elaborate in..
What adjustments should you make to your bond portfolio : Inflation has remained low for the past three years but you have come to the conclusion that trend is ending and inflation will increase significantly over the next 18 months. Assume you have reached this conclusion prior to other investors reaching ..
How much should they be willing to pay for risk reduction : A firm has a WACC of 10% and $50,000,000 in assets. They feel that that they can reduce their WACC to 9% by doing a better job of managing risk. How much should they be willing to pay for risk reduction?
At what volume of output would the two locations : At what volume of output would the two locations have the same total cost? For what range of output would location A be superior? For what range would B be superior?
The process of pooling loans into bonds is called : The process of pooling loans into bonds is called ___________. The idea that the failure of one firm can cause other firms to fail is called ___________.
The option pricing model was developed : The Option Pricing Model was developed by ________________. Hedging activities and buying insurance are examples of _______________.
Considering expanding operations to meet growing demand : A corporation is considering expanding operations to meet growing demand. With the capital expansion, the current accounts are expected to change. Management expects cash to increase by $20,000, accounts receivable by $40,000, and inventories by $60,..
Determine the volume necessary at each location : Determine the volume necessary at each location to realize a monthly profit of $ 10,000. If expected sales at A, B, and C are 21,000 per month, 22,000 per month, and 23,000 per month, respectively, which location would yield the greatest profits?

Reviews

Write a Review

Operation Management Questions & Answers

  The fate of opel

The once mighty General Motors, unable to survive by meeting the needs of customers turned to the taxpayers for a bailout in the U.S. In Europe its Opel subsidiary required similar life support from the German government. However, GM wanted to get..

  Determine greatest value in integrating order entry systems

Analyze the various functionalities of pharmacy information systems that can aid in the reduction of medication errors and make at least two recommendations for improvements in future systems.

  Consider the measures in different production lines

Consider the measures and data you use (in either your personal or job activities). When are differences (between one time period and another, between different production lines, etc.) between average or actual results important. How can you or y..

  Illustrate what might the organization do to increase sales

Explain why is Williams Sonoma also its brand Pottery Barn experiencing slowed growth also financial difficulties. Illustrate what might the organization do to increase sales also improve its image.

  Obtain estimates of daily relatives for the number

Obtain estimates of daily relatives for the number of customers at a restaurant for the evening meal, given the following data. Use the centered moving average method.

  Value of working capital instead of a cash flow budget

An advantage of using the value of working capital instead of a cash flow budget to analyze a farm's liquidity would be:

  What is the companys productivity now

What is the companys productivity if no defective motors are reworked - What is the company's productivity if no defective motors are reworked?

  Elucidate why cooperative approaches may stand up to legal

Elucidate why cooperative approaches may stand up to legal review more easily in unionized plants than in non-unionized environments

  Which type of power has tom used over celia

The group laughs at Tom's joke, and Celia doesn't add any more input into the logo discussion. Which type of power has Tom used over Celia?

  How do business people and academic view peter drucker

How do business people and academic view peter drucker. What lesons did peter offered to modern managers. What did drucker think about capitalism in his later years? What were contributions to modern management?

  Construct pareto chart showing the relative frequency

Consider the types of poor driving habits that might occur at a traffic light. Make a list of the 10 you consider most likely to happen. Add the category of "other" to that list.

  Activity on arrow diagram to identify project duration

Draw a Activity-on-Arrow Diagram, identify project duration, slack for each activity, and project critical path for the following.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd