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
Q. What is Labor Market? Labor market in the IS-LM model is the same as in cross model. Hence the IS-LM model is only applicable if profit-maximizing quantity of L would result

You are the manager of a firm that receives revenues of $50,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -3,

Only two identical firms i = A;B, each with marginal cost MCi = 40 and no fixed cost, operate in a market with demand: Q     p 1    160 2    120 3     90 4     70

1. Suppose that the supply curve for school-teachers is LS = 20,000 + 350W, and the demand curve for schoolteachers is LD = 100,000 - 150W, where L = the number of teachers and W =

Did Germany ever go back on the Gold Standard after World War I and prior to World War II? If so, what were the economic and political effects of doing so? I know it was on the Gol

What is Gross National Product? Gross National Product (GNP): It measures the value of output produced through a country is citizens anywhere within the world, in a speci

The greater the number of different goods available in an economy, Question 1 options: a) the less likely it is that a double coincidence of wants will exist, and the less likel

unplanned changes in inventory are counted as inventory spending by firms.say true or false and justify


what are the advantages and disadvantages of unemployment