1. Cowboy Metal Cutting produces a laser-cut part based on customer orders. The number of units requested on a customer's order for the laser-cut part can vary from 1 to 150. Cowboy has determined that three different cutting machines can be used to produce this part. An economic analysis of production costs has produced the data in the table below: Cutting Tool ID Fixed Cost Per Order Variable Cost Per Unit CT1 $300 $9.00 CT2 $750 $3.00 CT3 $500 $5.00 a. Plot the total production cost of each tool against the number of units produced. For all order sizes between 1 and 150, determined the most economical cutting machine for an order of that size. b. For an order size 75, what is the minimum selling price of each unit if the company desires a profit of 15%?

1. Cowboy Metal Cutting produces a laser-cut part based on customer orders. The number of units requested on a customer's order for the laser-cut part can vary from 1 to 150. Cowboy has determined that three different cutting machines can be used to produce this part. An economic analysis of production costs has produced the data in the table below: Cutting Tool ID Fixed Cost Per Order Variable Cost Per Unit CT1 $300 $9.00 CT2 $750 $3.00 CT3 $500 $5.00 a. Plot the total production cost of each tool against the number of units produced. For all order sizes between 1 and 150, determined the most economical cutting machine for an order of that size. b. For an order size 75, what is the minimum selling price of each unit if the company desires a profit of 15%?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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