Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Eng. Eco.
Q1 Gamma Associates has the following details:Fixed cost = Rs. 20,00,000Variable cost per unit = Rs. 100Selling price per unit = Rs. 200Find(a) The break-even sales.
4) A company produces a chemical at a rate of 1000 tons/year with a planned sale
price of 0.8 TL / kg. The fixed cost is 60000 TL/year and direct production is 5.5 x
106 TL/year at full capacity.
Determine the direct product cost per unit product (TL /kg).
Find the breakeven capacity of the company for this product.
Draw breakeven chart according to determined results in (ii).
Calculate the new breakeven point if the price of the product decreased to
0.5 TL/kg.
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The reason that Starlink is able to charge a lower monthly price for their…
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- Heinrich is a manufacturing engineer with the Miller Company. He has determined the costs of producing a new product to be as follows: Equipment cost: $288,000/year Equipment salvage value at EOY5 = $41,000 Variable cost per unit of production: $14.55 Overhead cost per year: $48,300 If the Miller Company uses a 5-year planning horizon and the product can be sold for a unit price of $39.75, how many units must be produced and sold each year to break even?arrow_forwardHelp....... Solve Write Company has a maximum capacity of 200,000 units per year. Variable manufacturing costs are $12 per unit. Fixed overhead is $600,000 per year. Variable selling and administrative costs are $5 per unit, and fixed selling and administrative costs are $300,000 per year. The current sales price is $23 per unit. A. What is the breakeven point in (a) sales units and (b) sales dollars? B. How many units must the Write Company sells to earn a profit of $240,000 per year?arrow_forwardTwo automatic systems for dispensing maps are being compared by the state highway department. The accompanying breakeven chart of the comparison of these systems (System I vs. System II) shows total yearly costs for the number of maps dispensed per year for both alternatives. Answer the following questions. (a) What is the fixed cost for System I? (b) What is the fixed cost for System II? (c) What is the variable cost per map dispensed for System I? (d) What is the variable cost per map dispensed for System II? (e) What is the breakeven point in terms of maps dispensed at which the two systems have equal annual costs? (f) For what range of annual number of maps dispensed is System I recommended? (g) For what range of annual number of maps dispensed is System II recommended? (h) At 3000 maps per year, what are the marginal and average map costs for each system?arrow_forward
- Define life-cycle cost analysis (LCCA)arrow_forwardPROBLEM NO. 1: The cost of producing a commodity consists of P35 per unit of labor, P42 per unit of materials, and P10 per unit for other variable costs. Cost of utilities and rents amounts to P850,000 per month. If the commodity is sold at P310 each; (a) What is the profit/loss if 3369 units were sold? (b) How many pieces must be produced each month for the manufacturer to breakeven?arrow_forwardBenjamin used regression analysis to fit quadratic relations to monthly revenue, R, and total cost, TC, data with the following results, where Q is quantity. R = −0.008Q2 + 32Q TC = 0.005Q2 + 2.2Q + 10 (a) Plot R and TC. Estimate the quantities QBE and Qp, where the maximum profit should occur. Estimate the amount of profit at this quantity. (b) The profit relation P = R − TC and calculus can be used to determine the quantity Qp at which the maximum profit will occur and the amount of this profit. The equations are: Profit = aQ2 + bQ + c Qp = −b/2a Maximum profit = −b2/4a + c Use these relations to confirm your graphical estimate of QP. (Your instructor may ask you to derive the relations above.)arrow_forward
- Break-Even Point Hilton Enterprises selis a product for $119 per unit. The variable cost is $68 per unit, while faed costs are $436,968. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $124 per unit a. Break-even point in sales units units b. Break-even point if the selling price were increased to 124 per unit units 00arrow_forwardGiven the selling price at P120 per unit; contribution margin at 25% and fixed cost at P250,000, the total variable expenses at the breakeven point would be? a.)350 000 b.)750 000 c.)450 000 d.)250 000arrow_forwardb) A manufacturing contractor has produced a proposal to deliver 400 units at a price based on the time of 240 hrs which it took to make the first 100 units (2.4 hrs per unit). However, productivity studies have shown that it is possible to achieve a progress ratio of 80% for this type of product. Based on this knowledge how would you advise the contractor to revise the estimated cost?arrow_forward
- You work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = $70 per unit; fixed production cost = $240,000 per year; variable production cost = $1,700,000 per year; variable selling expenses = $96,000 per year. As a first-cut, you decide to use this information to estimate (a) the breakeven production rate per year, (b) the company’s profit last year, and(c) the annual production rate that would generate a profit of $1,000,000 per year. What are your estimates? Draw the breakeven diagram and spreadsheet functions necessary to perform the analysisarrow_forwardYou work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = $70 per unit; fixed production cost = $240,000 per year; variable production cost = $1,700,000 per year; variable selling expenses = $96,000 per year. As a first-cut, you decide to use this information to estimate (a) the breakeven production rate per year, (b) the company’s profit last year, and (c) the annual production rate that would generate a profit of $1,000,000 per year. What are your estimates?arrow_forwardsolve c and d part only...hand writtenarrow_forward
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