Using the data in "Sroufe Manufacturing intends to increase capacityby overcoming a bottleneck operation by adding new equipment.Two vendors have presented proposals. The fixed costs for proposalA are $50,000, and for proposal B, $70,000. The va riablecost for A is $12.00, and fo r B, $10.00. The revenue generated byeach unit is $20.00.a) What is the break-even point in units for proposal A?b) What is the break-even point in units for proposal B?a) What is the brea k-even point in dollars for proposal A if youadd $10,000 installation to the fixed cost?b) What is the break-even point in dollars for proposal B if youadd S l 0,000 installation to the fixed cost?
Using the data in "Sroufe Manufacturing intends to increase capacityby overcoming a bottleneck operation by adding new equipment.Two vendors have presented proposals. The fixed costs for proposalA are $50,000, and for proposal B, $70,000. The va riablecost for A is $12.00, and fo r B, $10.00. The revenue generated byeach unit is $20.00.a) What is the break-even point in units for proposal A?b) What is the break-even point in units for proposal B?a) What is the brea k-even point in dollars for proposal A if youadd $10,000 installation to the fixed cost?b) What is the break-even point in dollars for proposal B if youadd S l 0,000 installation to the fixed cost?
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Using the data in "Sroufe Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The va riable cost for A is $12.00, and fo r B, $10.00. The revenue generated by each unit is $20.00. a) What is the break-even point in units for proposal A? b) What is the break-even point in units for proposal B? a) What is the brea k-even point in dollars for proposal A if you add $10,000 installation to the fixed cost? b) What is the break-even point in dollars for proposal B if you add S l 0,000 installation to the fixed cost? |
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