ZuoTi.Pro
Question

Company A is considering replacing its current production line. The current line has fixed cost 350,000...

Company A is considering replacing its current production line. The current line has fixed cost 350,000 per year, has variable cost 10 per unit and sells for 14 per unit. The new production line will have fixed cost of 500,000, variable cost of 9.6 per unit and sells for 16 per unit. 1. Determine the breakeven quantities for both lines. 2. Plot the two profit relations. 3. Determine the breakeven quantity between the two alternatives.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Company A is considering replacing its current production line. The current line has fixed cost 350,000...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A small business company is considering updating the current production line. There are two plans. For...

    A small business company is considering updating the current production line. There are two plans. For plan A, the fixed cost will be $40,000 and the variable cost will be $27 per unit after the update. For plan B, the fixed costs will be $51,000 and the variable cost will be $26 per unit after the update. Please answer the following question: Suppose the selling price is $32. Also, the company aims to achieve a profit of $9,000 after the...

  • A plant operation has fixed costs of $1,000,000 per​ year, and its output capacity is 100,000...

    A plant operation has fixed costs of $1,000,000 per​ year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $40 per​ unit, and the product sells for $65 per unit. a. Construct the economic breakeven chart. b. Compare annual profit when the plant is operating at 85​% of capacity with the plant operation at​ 100% capacity. Assume that the first 85​% of capacity output is sold at ​$65 per unit and that the remaining 15​%...

  • 13 You are considering investing in a mass assembly production line. The fixed costs for the...

    13 You are considering investing in a mass assembly production line. The fixed costs for the production line equipment with instulation is $3 million. Each unit of product sells for $20 and has a $5 per unit variable cost. Labor, materials, and energy costs are factored into the variable costs. Expected demand is 300,000 3 units. What is the break-even units? 4 Fixed Costs (S): 5 Unit Cost (S): 6 Variable Cost (S) Break-Even Units per unit per unit You...

  • ACME manufacturing is considering replacing an existing production line with a new line that has a...

    ACME manufacturing is considering replacing an existing production line with a new line that has a greater output capacity and operates with less labour than the existing line. The existing line, which was purchased several years ago, originally cost $500,000 and currently has a book value of $250,000. The new line would cost $750,000 and would be depreciated on a straight-line basis over a useful life of 5 years. At the end of five years, the new line could be...

  • A plant operation has fixed costs of $3,000,000 per year, and ts output capacity is 100,000...

    A plant operation has fixed costs of $3,000,000 per year, and ts output capacity is 100,000 electrical appliances per year. The vaniable cost is $30 per unit, and the product sells for $90 per unit a. Construct the economic breakeven chart b. Compare annual profit when the plant is operating at 70% of capacity with the plant opera on at 100% capacity Assume that the frst 70% of capacity output s sold at 90 per unit and that the remaining...

  • I need your support for Part B Only Zandri Company is considering replacing its existing cutting...

    I need your support for Part B Only Zandri Company is considering replacing its existing cutting machine with a new machine that will help reduce its defect rate. Relevant information for the two machines includes the following: Cost Item Existing Machine New Machine Monthly fixed costs $ 28,000 $ 42,000 Variable cost per unit $ 41 $ 36 Sales price per unit $ 52 $ 52 Requirements (a) Determine the sales level, in number of units, at which the costs...

  • ( I ONLY NEED TO KNOW WHAT THE SUNK COST IS) A company is considering replacing...

    ( I ONLY NEED TO KNOW WHAT THE SUNK COST IS) A company is considering replacing an old piece of machinery, which cost $602,300 and has $353,000 of accumulated depreciation to date, with a new machine that has a purchase price of $487,000. The old machine could be sold for $63,300. The annual variable production costs associated with the old machine are estimated to be $156,100 per year for eight years. The annual variable production costs for the new machine...

  • Help with managerial accounting?? Karney Company has revenues of $500,000, variable costs of $350,000, and fixed...

    Help with managerial accounting?? Karney Company has revenues of $500,000, variable costs of $350,000, and fixed costs of $135,000. The sales price per unit is $100 and the Variable Cost per unit is $70, at this level of sales the Fixed Costs per unit is $27. a. compute the contribution margin per unit and the contribution margin ratio b. compute total unfits and sales dollars needed to break even. c. compute total sales dollars needed to achieve a target operating...

  • Break-even Quantity Shapland Inc. has fixed operating costs of $350,000 and variable costs of $50 per...

    Break-even Quantity Shapland Inc. has fixed operating costs of $350,000 and variable costs of $50 per unit. If it sells the product for $85 per unit, what is the break-even quantity? Round your answer to the nearest whole numner. units

  • Acme Company is considering replacing outdated production equipment that will allow for production cost savings of...

    Acme Company is considering replacing outdated production equipment that will allow for production cost savings of $20,000 per month. The new equipment will have a five-year life and cost $800,000, with an estimated salvage value of $50,000. Acme's cost of capital is 10%. Calculate the payback period and the accounting rate of return for the new production equipment.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT