Crestline Manufacturing must decide whether to invest in process option X or option Y. Process X includes automated assembly equipment and requires three employees. On the other hand, process Y includes semi-automated assembly equipment and requires six employees. Process X incurs a fixed cost of $900,000 and a variable cost of $25 per unit. Machine Y incurs a fixed cost of $600,000 and a variable cost of $30 per unit. Solve the following and show all the steps: a) What is the break-even quantity between these two processes? Provide a rough plot of your analysis and show the break-even point on the plot. b) If predicted demand for next year is 80,000 panel folds, which process option do you recommend? How much cost does the recommended process save?

The investment cost of the fruit juice business was determined as 3,200,000 TL. The depreciation rate of the enterprise is determined as 10%. Fruit juice and concentrate are produced in equal amounts at the facility. The business operates 300 days a year and 12 hours a day. The maintenance and repair expenses of the enterprise are determined as 65,000 TL/year, the unexpected expenses are 36.000 TL/year, the fixed tax total is 82.000 TL/year, and the total personnel salaries are 300.000 TL/year. Fruit juice production cost was calculated as 2.6 TL/kg product and concentrate production cost as 6.8 TL/kg product. Fruit dry matter rate was 16%, fruit juice dry matter rate was 6%, and concentrated dry matter rate was 72%. Since the raw material price is 3.5 TL/kg of raw material, fruit juice and concentrate sales prices are 5.8 TL/kg and 32 TL/kg, what is the minimum raw material amount that must be processed per hour for the business to make a profit?

Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 15,000 units and 35,000 units per month. The new toy will sell for $8.00 per unit. Enough capacity exists in the company’s plant to produce 20,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $4.00 , and incremental fixed expenses associated with the toy would total $34,000 per month.   Neptune has also identified an outside supplier who could produce the toy for a price of $3.00 per unit plus a fixed fee of $47,000 per month for any production volume up to 20,000 units. For a production volume between 20,001 and 45,000 units the fixed fee would increase to a total of $94,000 per month.   Required: 1. Calculate the break-even point in unit sales assuming that Neptune does not hire the outside supplier.   2. How much profit with Neptune earn assuming:…

Hudson Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows:     Demand Staffing Options High Medium Low Own staff 600 550 350 Outside vendor 900 650 450 Combination 700 600 400     a. If the demand probabilities are 0.4, 0.25, and 0.35, which decision alternative will minimize the expected cost of the data processing operation? Own Staff What is the expected annual cost associated with that recommendation? If required, round your answer to the nearest thousand of dollars.     Expected annual cost = $  ___________

Use the following information for the next 3 problems: ABC Company plans to construct a 60,000 sq. ft private warehouse and rent public warehouse as needed. Warehouse inventory turns at the rate of 2 times per month. One pound of merchandise occupies 0.2 cubic feet of warehouse space and can be stacked 10 feet high. Given aisles, and normal operating efficiency, only 50 percent of the total warehouse space is actually used for storage. Assume the facility is being built to size so no additional space is allowed for future product growth.       A private warehouse can be constructed for $36 per sq. ft. and can be amortized over 20 years. Annual fixed costs amount to $20 per sq. ft. of total space. The cost of operation is $0.03 per pound of throughput. Space may also be rented for a storage charge on inventory of $0.06 per pound per month and a handling charge of $0.05 per pound of throughput. Monthly demands for a typical year are as follows: Month Demand (lb) Jan 2,000,000…

It is summertime and your winter coat factory is trying to decide its production schedule and staffing level for the next season. You are forecasting a demand of 5000 coats in October, 8000 coats in November, 8000 coats in December, 12000 coats in January, 12000 coats in February, and 9000 coats in March. You want to manufacture these coats at the lowest cost possible/ The first decision you need to make is how many people to hire. Each employee will cost $2500 a month. You don’t want to hire or fire any employees mid-season in order to minimize disruptions in your factory floor. You can have employees idle if there isn’t sufficient work for them to do. Employees still need to be paid even if they are idle. An employee works 20 business days a month and takes half a day to produce one coat. The employees can also be asked to work overtime, in which case you need to pay them $70 per coat they produce. You don’t need to assume there is any capacity constraint on the number of overtime…

The annual sales of Crimson Pharmacy are expected to be given by S = 2.5 + 0.4t million dollars t years from now, whereas the annual sales of Cambridge Pharmacy are expected to be given by S = 1.2 + 0.8t million dollars t years from now. When will Cambridge's annual sales first surpass Crimson's annual sales?

An operations manager is deciding on the level of automation for a new process. The fixed cost for automation includes the equipment purchase price, installation, and initial spare parts. The variable costs per unit for each level of automation are primarily labor related. Each unit can be sold for $84. As in many cases, you have the default alternative of doing nothing ($0 fixed cost, $0 variable costs). What is the break-even point for option C? DO NOT INCLUDE A COMMA. Round your answer to the nearest whole number and do not include units or a comma. For example, submit 12450 and NOT 12,450. Alternative Fixed Costs A B C $100,000 $282,000 $560,000 Variable Costs per Unit $54 $37 $20 Round your answer to the nearest whole number and do not include units.

Ramona Diaz Ltd. produces two products, P1 and P2, at its two departments: Machining and Assembly, as shown in the table below. The accountant tries to allocate overhead costs to the two products.  If the accountant decides to allocate overhead based on machine hours, what is P2’s share of the total overhead costs?       $180,000       $200,000       $220,000       $240,000

How do I figure out the following problem? A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $14,000 per year and variable cost = $10 per unit. If a price of $120 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.