Break-even analysis, Applied Statistics

a. How can break-even analysis be used in selecting a new plant site?

b. What are potential advantages and disadvantage of locating a production facility in foreign country instead of using domestic location?

c. A company that produces pleasure boats has decided to expand one of its line. Current facilities are insufficient to handle the increased workload, so company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities). Alternative A would involve substantial fixed costs but relatively low variable cost: fixed cost would be $250,000 per year, and variable costs would be $500 per boat. Subcontracting would involve a cost per boat of $2,500 and expansion would require an annual fixed cost of $50,000 and variable cost of $1,000 per boat.

  i.  Find the range of output for each alternative that would yield the lowest total cost

  ii. Which alternative would yield the lowest total cost for an expected annual volume of 150 boats?

  iii. What other factors might be considered in choosing between expansions and subcontracting?

Posted Date: 3/1/2013 1:19:12 AM | Location : United States







Related Discussions:- Break-even analysis, Assignment Help, Ask Question on Break-even analysis, Get Answer, Expert's Help, Break-even analysis Discussions

Write discussion on Break-even analysis
Your posts are moderated
Related Questions

We are interested in assessing the effects of temperature (low, medium, and high) and technical configuration on the amount of waste output for a manufacturing plant. Suppose that

Testing of Hypothesis One objective of sampling theory is Hypothesis Testing. Hypothesis testing begins by making an assumption about the population parameter. Then we gather

Variance The term variance was used to describe the square of the standard deviation by R.A.Fisher. The concept of variance is highly important in areas where it is possible to


How vital statistics are affects on our human life

Type of Correlation 1.      Positive and Negative Correlation: 2.      Simple Partial and Multiple Correlations. 3.      Linear and  Non linear or Correlations

Muti linear regression model problem An investigator is studying the relationship between weight (in pounds) and height (in inches) using data from a sample of 126 high school

The following data give the repair costs (in RM) for 30 randomly selected cars from a list of cars involved in collisions. a)  By using RM 1 as the lower limit of the first

Descriptive Statistics : Carrying out an extensive analysis the data was not a subject to ambiguity and there were no missing values.  Below are descriptive statistics that hav