Reference no: EM131224566
The time has come to evaluate (cost justify) a new piece of equipment for our production line. Your mission is to determine whether or not to purchase replacement equipment based upon the numbers given below.
Existing Equipment:
• Depreciation Cost Per Year = -0- (fully depreciated)
• Maintenance Cost = $13,000 per year
• Operator Labor = 2 people per shift, $13.50 per hour, 2080 hours worked per person, 2 shifts of operation @ 8 hours each
• Grand Total Overtime Hours = 333 per year
• Employee Benefits = 40% of all wages
• NRG Consumption = $73 per operating day
Note: Overtime hours are paid at a rate of 150% of regular pay for hours over 8 per shift.
Proposed Equipment:
• Depreciation Cost Per Year of Proposed Equipment = Purchase price of $240,000; economic life of 8 years
• Maintenance Cost = $6,000 per year
• Operator Labor = 1 person per shift, $13.50 per hour, 2080 hours worked per person, 2 shifts of operation @ 8 hours each
• Grand Total Overtime Hours = -0-
• Employee benefits = 40% of all wages
• NRG Consumption = $21 per operating day
Answer the following:
1. What is the total cost difference, per year, for operating the replacement equipment versus the existing equipment?
2. Should we replace our existing equipment? Why or why not?
3. What is the simple, annual % rate of return on the $240,000 investment required for the replacement equipment?
|
Which explains how the steps are to be performed
: Which of the following explains how the steps are to be performed? Which of the following are true about an Enterprise Resource Planning (ERP) System? Which of the following are principles of safe design?
|
|
Contribution margin on its barbie dolls
: Why might Mattel set a much lower contribution margin on its Barbie dolls than on the accessories for the dolls?
|
|
Different stages of awareness of their own cultural identiti
: What stages have you experienced or are you currently experiencing? Be specific, using examples of what you thought, felt, and did at various stages. Pay particular attention to what triggered your transition from one stage to the next.
|
|
Evaluate new piece of equipment for our production line
: The time has come to evaluate (cost justify) a new piece of equipment for our production line. What is the total cost difference, per year, for operating the replacement equipment versus the existing equipment? Should we replace our existing equipmen..
|
|
Importance of gdp as a measure of our economic well-being
: GDP as a Measure of Well-being- Mayer describes the importance of GDP as a measure of our economic well-being. But they also note that this measure omits some things that are important in describing how well-off we are.
|
|
Problem regarding the managerial economics
: Describe 2 ways in which you would expect a company such as Miller to experience economies of scale that Corpus Christi Cheer Beer does not.
|
|
Program in the machine language of the simmac
: CISC 640 Nova Southeastern University Introduction - Create a virtual machine/operating system for the machine described below that will accept programs in the target machine language. The details for this assignment are presented below following t..
|
|
Determine a value per share of ragan stock
: Determine a value per share of Ragan stock. - Assuming the company continues its current growth rate, what is the value per share of the company's stock?
|