The variable cost of producing specialty value-added stainlesssteel tubing varies according to the quantity produced per year. The variable cost is $500 per ton from 0 to 700 tons. Above this level, the variable cost is different. At this time, we are producing 600 tons per year, and the average cost per ton is $800. Next year, we anticipate ramping up production to 1,000 tons, and the projected average cost for all 1,000 tons will be $710 per ton. Solve, a. What is the current fixed cost? b. If the fixed cost holds constant next year, what is the variable cost of production for tons above 700 tons?

A survey of total project construction costs for a wide range of buildings (hospitals, schools, banks, nursing homes, etc.) in 2006 found that the average cost was $13,136,431. The mechanical and electrical portions of that cost were $2,511,893 and $1,585,384, respectively. If the total project cost in 2017 increases to $15,700,000, what would the mechanical portion of the total cost equal, provided the percentage (a) remained the same as in 2006, and (b) increased by 20% from the 2006 portion?

A manufacturing company needs to know whether to produce components for a Bird Feeder in-house or buy the components from a fabricator. To make the components in-house, the company needs to buy an injection molding machine, which costs $9,000. The company expects to produce 10,000 units per year. The following estimates have been made: Fixed cost per year Variable cost per part Make $9,000 $6.45 Buy. $0 $7.20 a. What is the break-even point? b. If the number of units produced is 10,000, which option is cheaper: Make or Buy? Explain why. b. If the number of units produced is increased to 12,500, which option is cheaper: Make or Buy? Explain why.