A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows:Number ofMachinesTotal AnnualFixed CostsCorrespondingRange of Output1 $ 9,600 0 to 3002 15,000 301 to 6003 20,000 601 to 900Variable cost is $10 per unit, and revenue is $40 per unit.a. Determine the break-even point for each range.b. If projected annual demand is between 580 and 660 units, how many machines shouldthe manager purchase?

A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows:Number ofMachinesTotal AnnualFixed CostsCorrespondingRange of Output1 $ 9,600 0 to 3002 15,000 301 to 6003 20,000 601 to 900Variable cost is $10 per unit, and revenue is $40 per unit.a. Determine the break-even point for each range.b. If projected annual demand is between 580 and 660 units, how many machines shouldthe manager purchase?

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Description: A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows:Number ofMachinesTotal AnnualFixed CostsCorrespondingRange of Output1 $ 9,600 0 to 3002 15,000 301 to 6003 20,000 601 to 900Variable

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section5.3: Assignment Models

Problem 12P

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