A new Rs. 40, 00,000 machines has just been installed in a plant. It will have no salvage value when it is removed. The plant manager has asked you to estimate the economic service life of the machine. He estimates that annual maintenance cost will be Rs. 2, 50,000 in first year and increase by 10% per year. What service life will result in lowest equivalent uniform annual cost if MARR is 15%? (4589.55)

Bags/Participants Fixed Cost Variable Cost Total Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 400 $1,700 $5,200 $6,900 500 $1,700 $9,000 $10,700 600 $1,700 $15,000 $16,700 700 $1,700 $23,800 $25,500 800 $1,700 $36,800 $38,500 900 $1,700 $55,800 $57,500 1,000 $1,700 $83,000 $84,700   Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order?  At what quantity of bags will profits be maximized? A   Use the profit maximizing rule, MR ≥ MC, buy 300 bags. B   Use the profit maximizing rule, MR ≥ MC, buy 200 bags. C   Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. D   Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.

True/False Total cost can never be zero

A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. What is the break-even price of the set?