Weiss Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $50,000 for proposal A and $80,000 For proposal B. In addition to the proposed fixed costs from the two vendors, Weiss's management anticipates that they will have to spend $10,000 for installations to be completed. The variable cost is $14.00 for A and $10.00 for B. The revenue generated by each unit is $22.00. a) The break-even point in dollars for the proposal by Vendor A = (round your response to the nearest whole number). b) The break-even point in dollars for the proposal by Vendor B = (round your response to the nearest whole number).
Weiss Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $50,000 for proposal A and $80,000 For proposal B. In addition to the proposed fixed costs from the two vendors, Weiss's management anticipates that they will have to spend $10,000 for installations to be completed. The variable cost is $14.00 for A and $10.00 for B. The revenue generated by each unit is $22.00. a) The break-even point in dollars for the proposal by Vendor A = (round your response to the nearest whole number). b) The break-even point in dollars for the proposal by Vendor B = (round your response to the nearest whole number).
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 5E
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Weiss Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $50,000 for proposal A and $80,000 For proposal B. In addition to the proposed fixed costs from the two vendors, Weiss's management anticipates that they will have to spend $10,000 for installations to be completed. The variable cost is $14.00 for A and $10.00 for B. The revenue generated by each unit is $22.00.
a) The break-even point in dollars for the proposal by Vendor A =
(round your response to the nearest whole number).
(round your response to the nearest whole number).
b) The break-even point in dollars for the proposal by Vendor B =
(round your response to the nearest whole number).
(round your response to the nearest whole number).
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