Find the break-even point, Macroeconomics

Assignment Help:

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.)

 

 


Related Discussions:- Find the break-even point

Illustrate an example of consumer price index, Illustrate an example of Con...

Illustrate an example of Consumer Price Index For instance, if we spend twice as much on apples as on pears, apples would have twice the weight in basket. The precise details o

Optimal consumption choice, In our 2 period consumption savings model (with...

In our 2 period consumption savings model (with no leisure, u(c1, c2), suppose interest income in period 2 is taxed at the rates, where 0 a) Write down period 1 and period 2 bu

Nominal interest rate of 15% compounded annually, An investor has a series ...

An investor has a series of three $15,000 payments expected to be realized at the end of years three, four, and five. Calculate the present value P at time zero and the correspondi

Product information to consumers, Should the government increase, decrease ...

Should the government increase, decrease or remain the same in its level of intervention when it comes to mandating that companies provide product information to consumers? What ha

Can growth arise without development, Can growth arise without development?...

Can growth arise without development? Growth is just one feature of development and therefore is an essential but not enough condition for economic development. For example, g

Subsidizing the price of milk, "Subsidizing the price of milk or other agri...

"Subsidizing the price of milk or other agricultural products is not very expensive considering how many consumers there are in the United States. Therefore, there is little harmfu

Classical quantity theories, Classical Quantity Theories Quantity theor...

Classical Quantity Theories Quantity theories have had a long history and a widespread use in economics. As originally formulated these were not explicitly designed as theories

Principle of opportunity cost applies to your life, Give an example of how ...

Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook y

Market structures, illustrate and discuss the implications of variou market...

illustrate and discuss the implications of variou market structures (competitive and noncompetitive) for price determination

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd