Find the break-even point, Macroeconomics

The Widget Manufacturing Company must replace a widget machine, and is evaluating the capabilities of two systems. A requirement of management is that the machine chosen must be paid for during the first year of operation. The first machine under consideration, Machine A, would cost $65 000, and has the capacity to make up to 10 000 widgets per year, with a variable cost of $22 per widget. The second machine, Machine B, can produce widgets in almost half the time, would cost $72 000, but the variable cost is only $17 per widget. Widgets sell for $32.

(Excel is not required for this question: Just type)
1) a. Find the break-even point in terms of Widgets for each machine.
b. Find the break-even point in terms of dollars for each machine.
c. If the Widget Company is anticipating a demand of 5500 units in the next year, which machine
should be chosen?
d. If the demand is anticipated at 7500 units, would a different system be chosen?

2) Suppose an additional Machine A is installed to make Junior Widgets. The selling price for these devices is $12 per unit, with a variable price of $8. Calculate

a. the BEP
b. the BEP$
c. the profit (if any) at 24 000 units

3) At what volume would the Widget Manufacturing Company in the above question be indifferent to a choice between the two systems? (Hint: The costs will be the same.)



Posted Date: 3/29/2013 2:32:44 AM | Location : United States

Related Discussions:- Find the break-even point, Assignment Help, Ask Question on Find the break-even point, Get Answer, Expert's Help, Find the break-even point Discussions

Write discussion on Find the break-even point
Your posts are moderated
Related Questions
Rational Expectations School Expectations on the future values of economic variables play an important role in macroeconomic analysis and economic analysis in general. Because

What is the formula for computing for national income in a closed economy with government intervention

ACCOUNTING SYSTEM-EXAMPLE III  Now suppose the Jam Co. manufactures some herbal chemicals and flavors which it sells partly to Extracts Co., partly to Bottling Co., some are co

Estimate the cost of expanding a planned new clinic by 20,000ft^2. The appropriate capacity exponent is 0.66, and the budget estimate for 200,000ft^2 was $15 million.

Which of the following is assumed in constructing a typical production possibilities curve? a. the economy is engaging in international trade. b. production technology is fix

Q. Illustrate diffrent types of money? In most countries, one may identify two 'types of money': Bank deposits Currency and coins   The total value of all th

Assume that an economy's GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function is represe

what are the implications of corruption in economy and fiscal policy

Suppose one of your clients is four years away from retirement and has only $1,500 in pretax income to devote to either a Roth or a traditional IRA. The traditional IRA permits inv

Determine about the Inflation rate For many central banks, this is the variable they are mostly interested in controlling. For all central banks, it is an important variabl