Revcon Products has two subcontractor bids to automate a composite winding process. Process A will have fixed costs of $42,000 per year and will require two workers at $80 per day each. Together, these workers can generate 100 units. Process B will have fixed costs of $56,000 per year, but with this process, three workers will generate 200 units of product. If x is the number of units, the variable cost (VC) per year for B is best represented as: (a) VC per Year = [2(80)/100]x (b) VC per Year = [3(80)/200]x (c) VC per Year = [3(80)/200]x + 56,000 (d ) VC per Year = [2(80)/100]x + 42,000

Revcon Products has two subcontractor bids to automate a composite winding process. Process A will have fixed costs of $42,000 per year and will require two workers at $80 per day each. Together, these workers can generate 100 units. Process B will have fixed costs of $56,000 per year, but with this process, three workers will generate 200 units of product. If x is the number of units, the variable cost (VC) per year for B is best represented as: (a) VC per Year = [2(80)/100]x (b) VC per Year = [3(80)/200]x (c) VC per Year = [3(80)/200]x + 56,000 (d ) VC per Year = [2(80)/100]x + 42,000

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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