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1. Sunderland Furniture is determining the make or buy for a new type of futon. Make-or-buy analysis indicates whether it would be preferable to make the new futon in house (option A) as compared to buying from the low-cost furniture maker (option B). Here are the two options the company has: Option A: Make at Sunderland, fixed costs = $7,000, variable costs = $39 per unit Option B: Purchase the futon from a Mexico-based furniture maker for $46 per unit
If Sunderland decides to sell the futon made in house for $53 per unit, calculate the break-even quantity.
2. An emergency department of a city hospital can serve 110 patients per day. If the department wants to serve 100 patients per day instead of the 80 patients per day they normally serve, what will be the department’s percentage change in utilization?
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