2020202120222023368379398406In 2019, the company began constructing larger units (3,000 m² units compared tothose in 2018 as shown in the first table). The labor hours required to complete thefirst 3,000 m² unit was 24,000 hours but the labor hours decreased exponentiallywith time due to the experience gained by workers at a 90% learning slope untilreaching the 15th unit, after which a steady-state was reached. Assume the 2023average labor wage is $20 per hour and the company's fixed annual cost (overhead)is $2,300,000.(a) What is the breakeven selling price per unit?(b) What is the selling price per unit assuming the company wishes to earn 10%profit on top of the total costs incurred? A construction company is planning their projects for the year 2023. The companyis considering the construction of 30 buildings, each is 3,000 m². In 2018, they havebuilt 8 similar buildings but with smaller areas, and the material costs associatedwith those 8 buildings are shown in the following table:Building # Area (m²)123456781,4301,4751,6551,7901,9612,015Year2017201820192020202120222023399,387419,004427,696456,126461,765The materials cost index values are as shown in the following table:2,3752,533Cost ($)350,350358,326385,922Cost index321332348368379398406In 2019, the company began constructing larger units (3,000 m² units compared tothose in 2018 as shown in the first table). The labor hours required to complete thefirst 3,000 m² unit was 24,000 hours but the labor hours decreased exponentiallywith time due to the experience gained by workers at a 90% learning slope until

The break-even point is the one at which the revenues generated by the firm are equal to the costs…

2021 2022 2023 379 398 406 In 2019, the company began constructing larger units (3,000 m² units compared to those in 2018 as shown in the first table). The labor hours required to complete the first 3,000 m² unit was 24,000 hours but the labor hours decreased exponentially with time due to the experience gained by workers at a 90% learning slope until reaching the 15th unit, after which a steady-state was reached. Assume the 2023 average labor wage is $20 per hour and the company's fixed annual cost (overhead) is $2,300,000. (a) What is the breakeven selling price per unit? (b) What is the selling price per unit assuming the company wishes to earn 10% profit on top of the total costs incurred?

2021 2022 2023 379 398 406 In 2019, the company began constructing larger units (3,000 m² units compared to those in 2018 as shown in the first table). The labor hours required to complete the first 3,000 m² unit was 24,000 hours but the labor hours decreased exponentially with time due to the experience gained by workers at a 90% learning slope until reaching the 15th unit, after which a steady-state was reached. Assume the 2023 average labor wage is $20 per hour and the company's fixed annual cost (overhead) is $2,300,000. (a) What is the breakeven selling price per unit? (b) What is the selling price per unit assuming the company wishes to earn 10% profit on top of the total costs incurred?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2020
2021
2022
2023
368
379
398
406
In 2019, the company began constructing larger units (3,000 m² units compared to
those in 2018 as shown in the first table). The labor hours required to complete the
first 3,000 m² unit was 24,000 hours but the labor hours decreased exponentially
with time due to the experience gained by workers at a 90% learning slope until
reaching the 15th unit, after which a steady-state was reached. Assume the 2023
average labor wage is $20 per hour and the company's fixed annual cost (overhead)
is $2,300,000.
(a) What is the breakeven selling price per unit?
(b) What is the selling price per unit assuming the company wishes to earn 10%
profit on top of the total costs incurred?

A construction company is planning their projects for the year 2023. The company
is considering the construction of 30 buildings, each is 3,000 m². In 2018, they have
built 8 similar buildings but with smaller areas, and the material costs associated
with those 8 buildings are shown in the following table:
Building # Area (m²)
1
2
3
4
5
6
7
8
1,430
1,475
1,655
1,790
1,961
2,015
Year
2017
2018
2019
2020
2021
2022
2023
399,387
419,004
427,696
456,126
461,765
The materials cost index values are as shown in the following table:
2,375
2,533
Cost ($)
350,350
358,326
385,922
Cost index
321
332
348
368
379
398
406
In 2019, the company began constructing larger units (3,000 m² units compared to
those in 2018 as shown in the first table). The labor hours required to complete the
first 3,000 m² unit was 24,000 hours but the labor hours decreased exponentially
with time due to the experience gained by workers at a 90% learning slope until

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