A firm is deciding between two different sewing machines. Technology A has fixed costs of $500...
A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. What is the cost of production at the number of units where the company is indifferent between the two technologies?
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A firm is deciding between two different sewing machines.
Technology A has fixed costs of $500...
Production machines costs $ 6,000 $3,000 Marketing machines costs Administrative machines costs $1,500 firm uses the...
Production machines costs $ 6,000 $3,000 Marketing machines costs Administrative machines costs $1,500 firm uses the The expected useful life of all machines is five years, no salvage value, and the straight-line method. 2. On January 2, the firm purchased for cash raw materials at cost of $5,000. 3. On January 3, the following materials were issued for use: Production machines costs $ 2,000 Marketing machines costs $ 500 Administrative machines costs $250 4. On January 14, the company paid...
10% interest rate 20. A company is deciding between two machines with costs as shown below...
10% interest rate
20. A company is deciding between two machines with costs as shown below in the table (note that the salvage value is given as an addition). If the company plans to use the machines for only two years, what is the salvage on machine A in year 2 that will make both projects the same cost? End of Year Machine A Machine B 0 -$2,000 $1,000 $600 -$900 $700 $1,000 +$200 3 -$800 +$500 1 2
You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology...
You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function qequals=2020KL where q is the number of engines per week, K is the number of assembly machines, and L is the number of labor teams. Each assembly machine rents for requals=$50 comma 00050,000 per week, and each team costs wequals=$4 comma 0004,000 per week. Engine costs are given by the cost of labor teams and machines, plus $5...
(NPV) A company has the choice between two different types of machines. Machine A costs less,...
(NPV) A company has the choice between two different types of machines. Machine A costs less, but it also has a shorter life expectancy of two years. B costs more but lasts longer for four years. The expected cash flows after taxes for the two different types are as follows: Machine 0 1 2 3 4 A (10,000) 8,000 8,000 B (12,000) 5,000 5,000 5,000 5,000 The cost of money of the firm is 10%. Analyze the two options and advise...
1. On January 1, 2017 the following machines were acquired for cash: Production machines costs Marketing...
1. On January 1, 2017 the following machines were acquired for cash: Production machines costs Marketing machines costs $ 6,000 $3,000 Administrative machines costs $1,500 firm uses the The expected useful life of all machines is five years, no salvage value, and the straight-line method. 2. On January 2, the firm purchased for cash raw materials at cost of $5,000. 3. On January 3, the following materials were issued for use: Production machines costs $ 2,000 Marketing machines costs $...
Complete the table. Assume that the firm has $100 in total fixed costs and that each...
Complete the table. Assume that the firm has $100 in total fixed costs and that each additional worker costs $50 to hire. At what level of variable input does diminishing returns set in? What is the minimum cost output? Why is it important for a company to know its average total cost per item? Explain why average variable cost decreases then increases? Graph marginal product and marginal cost. What relationship do you see between marginal product and marm: - cost?...
Assume a perfectly competitive firm has positive fixed costs and marginal costs that initially fall and...
Assume a perfectly competitive firm has positive fixed costs and marginal costs that initially fall and then rise. Draw a diagram showing this firm’s marginal cost, average variable cost, and average total cost. (Hint: Pay careful attention to where the marginal cost curve intersects the others). Identify the minimum price the firm must receive before it shuts down, and the minimum price before it exits in the long run. Now, show what would happen if this firm experienced an increase...
You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology...
You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function q=20KL where is the number of engines per week, K is the number of assembly machines, and L is the number of labor teams. Each assembly machinerents for $30,000 per week, and each team costs w = $6,000 per week. Engine costs are given by the cost of labor teams and machines, plus $2,000 per engine for raw...
IPort Products makes cases for portable music players in two processes, cutting and sewing. The cutting process has a ca...
IPort Products makes cases for portable music players in two processes, cutting and sewing. The cutting process has a capacity of 100,000 units per year; sewing has a capacity of 120,000 units per year. Cost information follows. Inspection and testing costs $ 40,000 Scrap costs (all in the cutting dept.) 140,000 Demand is very strong. At a sales price of $12.00 per case, the company can sell whatever output it can produce. IPort Products can start only 100,000 units into...
IPort Products makes cases for portable music players in two processes, cutting and sewing. The cutting...
IPort Products makes cases for portable music players in two processes, cutting and sewing. The cutting process has a capacity of 150,000 units per year; sewing has a capacity of 185,000 units per year. Cost information follows: Inspection and testing costs $ 65,000 Scrap costs (all in the cutting dept.) 272,250 Demand is very strong. At a sales price of $19.00 per case, the company can sell whatever output it can produce. IPort Products can start only 150,000 units into...
Production machines costs $ 6,000 $3,000 Marketing machines costs Administrative machines costs $1,500 firm uses the The expected useful life of all machines is five years, no salvage value, and the straight-line method. 2. On January 2, the firm purchased for cash raw materials at cost of $5,000. 3. On January 3, the following materials were issued for use: Production machines costs $ 2,000 Marketing machines costs $ 500 Administrative machines costs $250 4. On January 14, the company paid...
10% interest rate
20. A company is deciding between two machines with costs as shown below in the table (note that the salvage value is given as an addition). If the company plans to use the machines for only two years, what is the salvage on machine A in year 2 that will make both projects the same cost? End of Year Machine A Machine B 0 -$2,000 $1,000 $600 -$900 $700 $1,000 +$200 3 -$800 +$500 1 2
1. On January 1, 2017 the following machines were acquired for cash: Production machines costs Marketing machines costs $ 6,000 $3,000 Administrative machines costs $1,500 firm uses the The expected useful life of all machines is five years, no salvage value, and the straight-line method. 2. On January 2, the firm purchased for cash raw materials at cost of $5,000. 3. On January 3, the following materials were issued for use: Production machines costs $ 2,000 Marketing machines costs $...
Complete the table. Assume that the firm has $100 in total fixed costs and that each additional worker costs $50 to hire. At what level of variable input does diminishing returns set in? What is the minimum cost output? Why is it important for a company to know its average total cost per item? Explain why average variable cost decreases then increases? Graph marginal product and marginal cost. What relationship do you see between marginal product and marm: - cost?...
You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function q=20KL where is the number of engines per week, K is the number of assembly machines, and L is the number of labor teams. Each assembly machinerents for $30,000 per week, and each team costs w = $6,000 per week. Engine costs are given by the cost of labor teams and machines, plus $2,000 per engine for raw...
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