A company operates a summer camp. The cost data for a 12-week summer camp is as follows: Charge per camper $400/week. Variable cost per camper $220/week, Fixed costs $240,000 per summer season Capacity per week 200 camper. the total number of campers to breakeven for the season is

A company operates a summer camp. The cost data for a 12-week summer camp is as follows: Charge per camper $400/week. Variable cost per camper $220/week, Fixed costs $240,000 per summer season Capacity per week 200 camper. the total number of campers to breakeven for the season is

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 1.1CE

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Company E manufactures regulators at a labor cost of $90 per unit and material cost of $300 per unit. The fixed charges on the business are $15,000 per month and the variable costs are $20 per unit per month. If the regulators are sold to retailers at $600 each, how many units must be produced and sold per month to breakeven?
In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the asphalt-mixing plant equipment. The contractor estimates that it will cost $1.25 per cubic yard mile (yd3 –mile) to haul the asphalt-paving material from the mixing plant to the job location. Factors relating to the two mixing sites are as follows: (See pic) The job requires 50,000 cubic yards of mixed-asphalt-paving material. It is estimated that four months (17 weeks of five working days per week) will be required for the job. Compare the two sites in terms of their total costs. Assume that the cost of the return trip is negligible. A) Which is the better site? B) For the selected site, how many cubic yards of paving material does the contractor have to deliver before staring to make a profit if paid $8.35 per cubic yard delivered to the job location?
The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: GH¢10 million for the land GH¢1/4 million per floor Specialized costs of GH¢10000x per floor. How many floors should the office complex contain if the average cost per floor is to be minimized?
The ore of a gold mine in the mountain province contains, on the average, 0.5 Gram of gold per ton. One method of processing cost P1,650 per ton recovers 93% of the gold, while another method cost only P1,500 per ton and recovers 81% of the gold. If gold can be sold at P8,500 per gram, which method is better and by how much?
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The Helstrom Corp. is a subcontractor in field operations to Boeing Company, manufacturer of the F18 Super Hornet multiple strike fighter aircraft. Helstrom is about to purchase diagnostics equipment to test on-board electronics systems. Estimates are: First cost $8,000,000 Annual operating cost $100,000…
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but maysometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, thesupplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also anopportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten-days-worth of inventory. (B) Economic Order Quantity 1. How much would the total inventory related (ordering plus carrying) costs be if the economic order quantity wasfollowed (excluding safety stock)? (D) Cost-Benefit Analysis: If ABC maintains its current inventory policy for the year,1. How much would the entity save it followed the reorder point and economic order quantity models?…
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but maysometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, thesupplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also anopportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten-days-worth of inventory. (B) Economic Order Quantity4. What is the annual demand for the boxes of candles?5. How much is the carrying cost of one box of candles for one year?6. What is the economic order quantity for the boxes of candles? Round UP.7. How many orders will be made per year on average if the economic order quantity was followed? Round off totwo decimal places.8. How much…
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 cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: (a) GH¢10 million for the land (b) GH¢1/4 million per floor (c) Specialized costs of GH¢10000x per floor. How many floors should the office complex contain if the average cost per floor is to be minimized?
A company planning to manufacture Webcams has to decide on the location of the production facility. Three location are being considered A, B and C. the fixed costs at the three locations are estimated to be $40000, $65000, and $32000 per year respectively. The variable costs are $4, $2.5 and $4.5 per unit, selling price in three location is $110, $180 and $90 respectively. Maximum capacity is 12000 unit/year in A, 19500 unit/year in B and 9600 unit/year in C. Find the following below: 1- Break- Even quantity in three location2- Profit or loss in location A when quantity is 400 and 300 3- Profit or loss in location B when quantity is 350 and 450 4- Profit or loss in location C when quantity is 425 and 325 5- Maximum revenues in A, B and C6- Range of profit at Demand in A, B and C Sketch the Break – Even chart each three location
A company estimates it will sell 5000 products in a year. I twould like to make some number N of equally spaced orders of size x units per order so that the total inventory cost (which includes prdering and storage) is minimized. a) If there is a 420 per order fixed cost plus a cost of $9 per unit ordered, and the storage cost per year is $10, find the number of orders and the numbers of units per order so that the goal of minimizing inventory costs is achieved. b) Suppose that the ordering cost doubles to $18 per unit ordered,and that no other chnage is made. Decide whether this should or should not change the solutuon that you foind in part (a), and justify your answer.