NewMach Inc. TRiedTested MayBEERuns Annual Fixed Costs 115,000 197,000 78,000 Per Hour Operating 140 125 150...
|
NewMach Inc. |
TRiedTested |
MayBEERuns |
|
|
Annual Fixed Costs |
115,000 |
197,000 |
78,000 |
|
Per Hour Operating |
140 |
125 |
150 |
|
Per Hour Labor Cost |
18 |
21 |
25 |
|
Per Hour Repair |
2.6 |
1.1 |
2.1 |
|
Per Hour Software Charge |
1.1 |
0 |
0 |
MakeIt4U does contract manufacturing, large batch production under contract to companies that place their brand on the product. Usually these contracts last at a minimum of 4 months. Data on the costs of the three machine options to buy is shown above.
- What is the lowest hour usage that the machine from NewMach is the lowest cost option?
- What is the highest hour usage that the machine from NewMach is the lowest cost option?
- What is the average cost per unit (including fixed cost) using the lowest overall cost machine if the hours of usage are estimated to be 5900?
Please answer all parts!
Homework Answers
| NewMach Inc. | TRiedTested | MayBEERuns | |
| Annual Fixed Costs | 115000 | 197000 | 78000 |
| Per Hour Operating | 140 | 125 | 150 |
| Per Hour Labor Cost | 18 | 21 | 25 |
| Per Hour Repair | 2.6 | 1.1 | 2.1 |
| Per Hour Software Charge | 1.1 | 0 | 0 |
| Total cost per hour | 161.7 | 147.1 | 177.1 |
a. The lowest hour usage that the machine from NewMach is the lowest cost option = 2403 hours
b. The highest hour usage that the machine from NewMach is the lowest cost option = 5616 hours
c. The average cost per unit (including fixed cost) using the lowest overall cost machine if the hours of usage are estimated to be 5900
For this usage, lowest cost option is TRiedTested.
Total cost = 197000+147.1*5900 = $ 1,064,890
Average cost per unit = 1064890/5900 = $ 180.5
Add Answer to:
NewMach Inc.
TRiedTested
MayBEERuns
Annual Fixed Costs
115,000
197,000
78,000
Per Hour Operating
140
125
150...
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