Joe’s Machine Shop has identified the grinding station as its key bottleneck and has identified two...
Joe’s Machine Shop has identified the grinding station as its key bottleneck and has identified two options for expansion. The Grinder 1000 has fixed costs of $20,000 and $10 per unit variable costs. The Grinder 2000 has fixed costs of $40,000 and $8 per unit variable costs. Revenue per unit is projected to be $16.
a. Determine the break-even point for each alternative.
b. At what volume of output would the two alter- natives yield the same profit?
c. If demand is 13,000 units, which option yields a higher profit? How much?
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Joe’s Machine Shop has identified the grinding station as its
key bottleneck and has identified two...
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A small firm intends to increase the capacity of a bottleneck operation by adding a new...
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A small firm intends to increase the capacity of a bottleneck operation by adding a new...
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Patterson Products Inc. is considering an upgrade to its
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consideration are shown below.
Option 1
Option 2
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$
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$
62.4
Direct labour cost per unit
$
66
$
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Variable overhead per unit
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Fixed manufacturing costs
$
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$
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variable selling costs of 10% of sales. Fixed selling and
administrative...
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Just need part A.
Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bonham and McKinney. Bonham would have fixed costs of $780,000 per year and variable costs of $13,000 per standard unit produced. McKinney would have annual fixed costs of $960,000 and variable costs of $11,900 per standard unit. The finished items sell for $28,000 each a) The volume of output at which both the locations have...
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Patterson Products Inc. is considering an upgrade to its
manufacturing equipment. The two upgrade options under
consideration are shown below.
Option 1
Option 2
Direct material cost per unit
$
93.6
$
62.4
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$
66
$
59
Variable overhead per unit
$
27.6
$
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Fixed manufacturing costs
$
2,160,000
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5,592,000
The selling price of the company’s product is $312 per unit with
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