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#6 day using Option 2, which option will breakeven in the short a) The must make the same amount of product of to breakeven b) Option 1 c) Option 2 7. Select the phrase that completes the following sentence so it is T

#6 day using Option 2, which option will breakeven in the short a) The must make the same amount of product of to breakeven b) Option 1 c) Option 2 7. Select the phrase that completes the following sentence so it is T

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Your company is manufacturing a complex part from an advanced material and is considering an upgrade to the current machine. Two options are available - the breakeven analysis for both is shown in the graph. 1.25E+06 -Option One -Option Two Revenue (R) [$] 1.00E+06 7.50E+05 5.00E+05 2.50E+05 0.00E+00 0.0E+00 5.0E+04 1.0E+05 1.5E+05 2.0E+05 2.5E+05 Amount of Material Processed (A) [kg] Cost (TC) or Revenue (R) [$]
Transcribed Image Text:Your company is manufacturing a complex part from an advanced material and is considering an upgrade to the current machine. Two options are available - the breakeven analysis for both is shown in the graph. 1.25E+06 -Option One -Option Two Revenue (R) [$] 1.00E+06 7.50E+05 5.00E+05 2.50E+05 0.00E+00 0.0E+00 5.0E+04 1.0E+05 1.5E+05 2.0E+05 2.5E+05 Amount of Material Processed (A) [kg] Cost (TC) or Revenue (R) [$]
E6A If the company can make 350 kilograms every day using Option 1 and 200 kilograme es day using Option 2, which option will breakeven in the shortest time? a) The must make the same amount of product of to breakeven b) Option 1 c) Option 2 7. Select the phrase that completes the following sentence so it is TRUE. At 1.5E5 kilograms a) Both machines are operating at a loss b) Option 1 will make more profit than option 2 c) Option 2 will make more profit than option 1 d) Both machines will make the same amount of profit 8. At 2.5E5 kilograms, how much profit in dollars will Option One make? 7.5E4 1E5 1.5E5 3E5 4.5E5 5.5E5 9E5 1E6 9. If management chooses Option Two, but wants the process to breakeven at 5E4 kilograms, what must the selling price in units of dollars per kilogram be set at to achieve this? 0, 1, 3, 4, 6, OR 7 10. If the variable cost of Option 1 is decreased by $0.50 per kilogram and all other variables remain the same, what will happen to the profit of Option 1 at 2.5E5 kilograms? A) it will decrease B) It will increase C) It will not change 11. If the sales price is increased by $0.75 per kilogram and all other variables remain the same, what will happen to the profit of Option 1 at 2.5E5 kilograms A) it will decrease B) It will increase C) It will not change 12. If the fixed cost of Option 1 is decreased by $5E5 and all other variables remain the same, what will happen to the profit of Option 1 at 2.5E5 kilograms? A) it will decrease B) It will increase C) It will not change
Transcribed Image Text:E6A If the company can make 350 kilograms every day using Option 1 and 200 kilograme es day using Option 2, which option will breakeven in the shortest time? a) The must make the same amount of product of to breakeven b) Option 1 c) Option 2 7. Select the phrase that completes the following sentence so it is TRUE. At 1.5E5 kilograms a) Both machines are operating at a loss b) Option 1 will make more profit than option 2 c) Option 2 will make more profit than option 1 d) Both machines will make the same amount of profit 8. At 2.5E5 kilograms, how much profit in dollars will Option One make? 7.5E4 1E5 1.5E5 3E5 4.5E5 5.5E5 9E5 1E6 9. If management chooses Option Two, but wants the process to breakeven at 5E4 kilograms, what must the selling price in units of dollars per kilogram be set at to achieve this? 0, 1, 3, 4, 6, OR 7 10. If the variable cost of Option 1 is decreased by $0.50 per kilogram and all other variables remain the same, what will happen to the profit of Option 1 at 2.5E5 kilograms? A) it will decrease B) It will increase C) It will not change 11. If the sales price is increased by $0.75 per kilogram and all other variables remain the same, what will happen to the profit of Option 1 at 2.5E5 kilograms A) it will decrease B) It will increase C) It will not change 12. If the fixed cost of Option 1 is decreased by $5E5 and all other variables remain the same, what will happen to the profit of Option 1 at 2.5E5 kilograms? A) it will decrease B) It will increase C) It will not change
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