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The following table shows the critical factors in a company's decision on choosing a new piece of equipment. Calculate the breakeven volume and utilization for each option and then find the range of volumes for which each option is the best decision.
Machine A
Machine B
Fixed Costs/Month
$ 20,000.00
$ 10,000.00
Variable Cost/Unit
$ 3.90
$ 4.25
Revenue/Unit
$ 21.00
$ 19.00
Capacity/Month
2500
1000
Breakeven Volume
Breakeven Utilization
Best Option Volume Range:
min
max
Examine each possibility and the factors you will consider in weighing the pros and cons.
Computer simulation Used to Evaluate Capacity In many systems, proper scheduling of the conveners ion can lead to better use of existing capacity. Sometimes a careful analysis r
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