Handheld fiber-optic meters with white light polarization interferometry are useful for measuring temperature, pressure, and strain in electrically noisy environments. The fixed costs associated with manufacturing are $800,000 per year. If a base unit sells for $2950 and its variable cost is $2075, (a ) how many units must be sold each year for breakeven? (b) what will the profit be for sales of 3000 units per year?
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- A remotely located air sampling station can be powered by solar cells or by running an above ground electric line to the site and using conventional power. Solar cells will cost $16,600 to install and will have a useful life of 5 years with no salvage value. Annual costs for inspection, cleaning, etc., are expected to be $2400. A new power line will cost $31,000 to install, with power costs expected to be $1000 per year. Since the air sampling project will end in 5 years, the salvage value of the line is considered to be zero. At an interest rate of 10% per year, (b) what must be the first cost of the above ground line to make the two alternatives equally attractive economically?A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $12,600 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1400. A new power line will cost $11,000 to install, with power costs expected to be $800 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 10% per year, which alternative should be selected on the basis of a future worth analysis?A chemical engineer is considering two sizes of pipes for moving distillate from a refinery to the tank farm. A small pipeline will cost less to purchase (including valves and other appurtenances), but will have a high head loss and, therefore, a higher pumping cost. The small pipeline will cost $1.7 million installed and have an operating cost of $12,000 per month. A larger-diameter pipeline will cost $2.1 million installed, but its operating cost will be only $8000 per month. Which pipe size is more economical at an interest rate of 1% per month on the basis of an annual worth analysis? Assume the salvage value is 10% of the first cost for each pipeline at the end of the 10-year project.
- Handheld fiber optic meters with white light polarization interferometry are useful for measuring temperature, pressure, and strain in electrically noisy environments. The fixed costs associated with manufacturing are $800,000 per year. If variable costs are $290 per unit and the company sells 4000 units per year, at what selling price per unit will the company break even?An engineering consulting firm measures its output in a standard service hour unit, which is a function of the personnel grade levels in the professional staff. The variable cost (cv) is $62 per standard service hour. The charge-out rate [i.e., selling price (p)] is $85.56 per hour. The maximum output of the firm is 160,000 hours per year, and its fixed cost (CF ) 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 the breakeven point (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%?machine part to be machined may be made either from an alloy of aluminum or steel. There is an order for 8,000 units. Steel costs P3.80 per kg, while aluminum costs 8.70 per kg. If steel is used, the steel per unit weighs 110 grams; for aluminum, 30 grams. When steel is used, 50 units can be produced per hour; for aluminum, 80 units per hour with the aid of a tool costing P640, which will be useless after the 8,000 units are finished. The cost of the machine and operator is P10.80 per hour. If all other costs are identical, determine which material will be more economical.
- An engineer is trying to decide which process to use to reduce sludge volume prior to disposal. Belt filter presses (BFP) will cost $203,000 to buy and $85,000 per year to operate. Belts will be replaced one time per year at a cost of $5500. Centrifuges (Cent) will cost $396,000 to buy and $119,000 per year to operate, but because the centrifuge will produce a thicker “cake”, the sludge hauling cost to the monofill will be $37,000 per year less than for the belt presses. The useful lives are 5 and 10 years for alternatives BFP and Cent, respectively, and the salvage values are assumed to be 10% of the first cost of each process whenever they are closed down or replaced. Use PW evaluation to select the more economical process at an interest rate of 6% per year over (a) the LCM of lives, and (b) a study period of 8 years. Are the decisions the same?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 analysisYou 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?
- 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?A process can be completed using either Alternative X or Y, where Y is an automated version of X. Alternative X has fixed costs of $10,000 per year with a variable cost of $50 per unit. If the process is automated, the fixed cost for Y will be $5,000 per year and its variable cost will be only $30 per unit. The minimum number of units that must be produced each year for alternative Y to be favored is closest to:a. Alternative Y will be favored for any level of productionb. 125c. 375d. Alternative X will be favored for any level of productionTwo membrane systems are under consideration for treating cooling tower blowdown to reduce its volume. A low-pressure seawater reverse osmosis(SWRO) system will operate at 500 psi and produce 720,000 gallons of permeate per day. It will have a fixed cost of $465 per day and an operatingcost of $485 per day. A higher pressure SWRO system operating at 800 psi will produce 950,000 gallons per day at an operating cost of $1280 perday. The fixed cost of the high pressure SWRO system will be only $328 per day because fewer membranes will be required. How many gallons of blowdown water must require treatment each day for the two systems to break even?