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IrinaVladis [17]
3 years ago
13

Two currently owned machines are being considered for the production of a part. The capital investment associated with the machi

nes is about the same and can be ignored for purposes of this example. The important differences between the machines are their production capacities (production rate x available production hours) and their reject rates (percentage of parts produced that cannot be sold). Consider the following table: Machine A Machine B Production rate Hours available for production Percent parts rejected 100 parts/hour 7 hours/day 3% 130 parts/hour 6 hours/day 10% The material cost is $6.00 per part, and all defect-free parts produced can be sold for $12 each. (Rejected parts have negligible scrap value.) For either machine, the operator cost is $15.00 per hour and the variable overhead rate for traceable costs is $5.00 per hour. Assume that the daily demand for this part is large enough that all defect-free parts can be sold. Which machine should be selected?
Business
1 answer:
andrew11 [14]3 years ago
7 0

Answer:

Machine A's output in a day = 100 × 7 = 700

Rejected output of machine A =0.03 × 700 = 21

Thus defect free output of machine A = 700 – 21 = 679

Revenue from Using Machine A = 679 × 12 = 8148

Cost of Using Machine A = 6 × (Defect free output) + 15 × 7 + 5 × 7 = 6 × 679 + 105 + 35 = 4214

Thus, profit from using machine A = 8148 – 4214 = 3934

Machine B's output in a day =130 × 6 = 780

Rejected output of machine B = 0.1 × 780 = 78

Thus, defect free output of machine B = 780 – 78 = 702

Revenue from Using Machine B = 702 × 12 = 8424

Cost of Using Machine B = 6 × 702 + 15 × 6 + 5 × 6 = + 105 + 35 = 4212 + 120 = 4332

Thus profit from using machine B = 8424 – 4332 = 4029

Since the profit from using machine B is higher, Machine B should be selected.

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Long-term Budgeting Period

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3 years ago
In the context of the external environment of an organization, the task environment: a. is formed by the interaction among a com
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Answer:

In the context of the external environment of an organization, the task environment: includes the sectors that conduct day-to-day transactions with the organization.

Explanation:

In an organization setting, what is tagged as external environment entails the sectors that transacts with the organization on a day-to-day routine. Their forms of relationship on daily basis makes them to serve as external environment, they could be clients as the case may be.

3 0
3 years ago
Bond investors will experience capital gains when Group of answer choices market interest rates are high and falling. market int
solong [7]

Answer:

A) market interest rates are high and falling

Explanation:

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3 0
3 years ago
Find the amount to which $550 will grow under each of the following conditions. Do not round intermediate calculations. Round yo
Cloud [144]

Answer:

(A)Fv= $864.2

(B) Fv= $1302.05

(C) Fv=  $2003.4

(D) Fv= $96817.21

Explanation:

Giving the following information:

Initial investment= $550

We will use the final value formula:

FV=Present value*(1+i)^n

(A) 9% compounded annually for 5 years.

Fv= 550*(1.09)^5=$864.2

(B) 9% compounded semiannually for 5 years.

Fv= 550*(1.09)^10= $1302.05

(C) 9% compounded quarterly for 5 years.

Fv= 550*(1.09)^15= $2003.4

(D) 9% compounded monthly for 5 years.

Fv= 550*(1.09)^60=$96817.21

6 0
3 years ago
A firm in the market for designer jeans has some degree of monopoly power. the demand curve it faces has a price elasticity of d
Pavlova-9 [17]

Answer:

$86.67 is the profit maximizing price for the monopolist

Explanation:

In order to find the profit maximizing price for the monopolist using its price elasticity and marginal cost we have to use the formula

Price= Marginal cost* (elasticity/elasticity+1)

Marginal cost = $65.0065

Elasticity = -4

Price = 65.0065 *(-4/-4+1) = 65.0065*(-4/-3)= 86.67

5 0
3 years ago
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