Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 11, Problem 25SE
To determine

Calculate the annual worth.

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An Engineering consultant firm measures its output in a standard hour unit, which is a function of the personnel grade levels in the professional stuff. The variable cost is $62 per standard service hour. The charge-out rate (i.e., selling price) is $85.56 per hour. The maximum output of the firm is 160,000 hours per year, and its fixed cost is $2,024,000 per year. For this firm: (a) What is the breakeven point in standard service hours and in percentage of total capacity? (b) What is the percentage reduction in breakeven (sensitivity) if fixed costs are reduced 10%; if variable cost per hour is reduced 10%; and if the selling price per unit is increased by 10%. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The fixed cost for a steam line per meter of pipe is $450X + $50 per year. Thecost for loss of heat from the pipe per meter is $4.8/X1/2 per year. Here, Xrepresents the thickness of insulation in meters, and X is a continuous designvariable. Solve, a. What is the optimum thickness of the insulation? b. How do you know that your answer in Part (a) minimizes total cost per year? c. What is the basic trade-off being made in this problem?
A plant operation has fixed cost of $2,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $70 per unit, and the product sells for $120 per unit.                  a) What is the annual break even volume of this product?            b) Compare annual profit when the plant is operating at 90% capacity with the plant operation at 100% capacity. Assume that the first 90% of capacity output is sold at $120 per unit and that the remaining 10% of production is sold at $100 per unit.
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