What is the monthly profit or loss

Assignment Help Operation Management

Reference no: EM131256139

California Gardens, Inc., prewashes, shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss, Operations VP, is considering a new Hi-Speed shredder to replace the old machine, referred to in the shop as "Clunker." Hi-Speed will have a fixed cost of $85,000 per month and a variable cost of $1.25 per bag. Clunker has a fixed cost of only $44,000 per month, but a variable cost of $1.75. Selling price is $2.50 per bag.

a) What is the crossover point in units (point of indifference) for Eric Limon/ Shutter stock the processes?

b) What is the monthly profit or loss if the company changes to the Hi-Speed shredder and sells 60,000 bags per month?

c) What is the monthly profit or loss if the company stays with Clunker and sells 60,000 bags per month?

Reference no: EM131256139

Questions Cloud

Suggest that hp software is faster for his kind of design : This translates into a variable cost of $200 per drawing for the HP system and $240 per drawing for the SP system. At his projected volume of 80 drawings per month, which system should he rent?

What is the gross profit margin for the cat condos : Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $140 each. Direct materials cost $18 per unit, and direct labor costs $10 per unit. Manufacturing overhead is applied at a rate of 230% of direct labor cost. Nonm..

Internet recruiting to find external sources of job : Discuss the pros and cons of using Internet recruiting to find external sources of job candidates? Response needs to be 200 words.

What is the future value of an ordinary annuity : What is the future value of an ordinary annuity if you deposit $500 per year for the next 10 years in an account that earns an interest rate of 13 percent annually?

What is the monthly profit or loss : What is the crossover point in units for Eric Limon/ Shutter stock the processes? - What is the monthly profit or loss if the company changes to the Hi-Speed shredder and sells 60,000 bags per month?

Define and discuss emotional intelligence : Our text suggests that leaders who are more sensitive to their emotions and their impact on others are more effective. Do you agree with this? Define and discuss emotional intelligence and support your discussion with a life experience.

Calculate the heat transfer : Four pounds of air is compressed in a cylinder-piston arrangement while the temperature remains constant at 70°F. If the initial pressure is 30 psi absolute, calculate the work needed to compress the air such that the absolute pressure doubles. Al..

What is the crossover point in units for the two machines : What is the crossover point (point of indifference) in units for the two machines? - What is the range of units for which machine A is preferable?

Net short-term capital gains-net long-term capital losses : During 2013, Gain Corporation has net short-term capital gains of $15,000, net long-term capital losses of $105,000, and taxable income from other sources of $460,000. How are the capital gains and losses treated on Gain’s 2013 tax return? Determine ..

User Account

All Pages