Find the break-even point, Macroeconomics

Assignment Help:

The Widget Manufacturing Company must replace a widget machine, and is evaluating the capabilities of two systems. A requirement of management is that the machine chosen must be paid for during the first year of operation. The first machine under consideration, Machine A, would cost $65 000, and has the capacity to make up to 10 000 widgets per year, with a variable cost of $22 per widget. The second machine, Machine B, can produce widgets in almost half the time, would cost $72 000, but the variable cost is only $17 per widget. Widgets sell for $32.

(Excel is not required for this question: Just type)
1) a. Find the break-even point in terms of Widgets for each machine.
b. Find the break-even point in terms of dollars for each machine.
c. If the Widget Company is anticipating a demand of 5500 units in the next year, which machine
should be chosen?
d. If the demand is anticipated at 7500 units, would a different system be chosen?

2) Suppose an additional Machine A is installed to make Junior Widgets. The selling price for these devices is $12 per unit, with a variable price of $8. Calculate

a. the BEP
b. the BEP$
c. the profit (if any) at 24 000 units

3) At what volume would the Widget Manufacturing Company in the above question be indifferent to a choice between the two systems? (Hint: The costs will be the same.)

 

 


Related Discussions:- Find the break-even point

Income and Spending, I am trying to figure out how to calculate the eqilibr...

I am trying to figure out how to calculate the eqilibrium level of income and the multiplier

Dynamic Multiplier, Discuss the concept of dynamic multiplier.

Discuss the concept of dynamic multiplier.

Medical goods or services, For which of the following medical goods or serv...

For which of the following medical goods or services is the income elasticity of demand largest? a. emergency services after a car accident b. measles shots c. physical ex

Country abandons its national currency, When a country abandons its nationa...

When a country abandons its national currency and adopts the currency of the United States, this is known as: A) A floating exchange rate system. B) Dollarization. C) A speculat

What are forms of price floors to lead inefficiency, What are forms of pric...

What are forms of price floors to lead inefficiency? Price floors frequently lead to ineffectiveness in the forms of: a. Inefficient allocation of sales in between sellers

What is the emerging market economy, What is the emerging market economy ...

What is the emerging market economy According to Investopedia, Antoine W. Van Agtmael of International Finance Corporation of the World Bank first mentioned the term emerging m

Feds actions on gdp impact, Suppose the banking system has reserves of $750...

Suppose the banking system has reserves of $750,000, demand deposits of $2,500,000 and a reserve requirement of 20%. a) If the Fed now purchases $125,000 worth of government bon

Annualized cost of the investment, After a competitive bidding process, Fir...

After a competitive bidding process, Firm G wins a contract to collect and dispose of Firm H's hazardous waste for $1,000 per year. Firm G's labor costs are $200 per year, and beca

Equilibrium interest rates, I am in a college econ class that I may possibl...

I am in a college econ class that I may possibly fail. anyone able to explain how to find this answer? Assume that the following data characterize the hypothetical economy of Tran

Marginal tax rates imposed on individuals and families, Compared with the s...

Compared with the situation before 1981, the marginal tax rates imposed on individuals and families with high incomes are now lower. What was the top marginal personal income tax r

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd