A company is evaluating which of two alternatives should be used to produce a product that will sell for $35 per unit. The following cost information describes the two alternatives. Process A Process B Fixed Cost $500,000 $750,000 Variable Cost per Unit $25 $23 1) The breakeven volume for Process B is Group of answer choices a) 50,000 units b) 30,000 units c) 62,500 units d) 20,000 units 2) If total demand (volume) is 120,000 units, then the company should Group of answer choices a) select Process B with a profit of $450,000 to maximize profit b) select Process A with a profit of $940,000 to maximize profit c) select Process B with a profit of $690,000 to maximize profit d) select Process A with a profit of $700,000 to maximize profit 3) The Point of Indifference between Process A and Process B occurs at a total cost of $____________ . Group of answer choices a) 4,375,000 b) 1,390,000 c) 3,625,000 d) 125,000
A company is evaluating which of two alternatives should be used to produce a product that will sell for $35 per unit. The following cost information describes the two alternatives. Process A Process B Fixed Cost $500,000 $750,000 Variable Cost per Unit $25 $23 1) The breakeven volume for Process B is Group of answer choices a) 50,000 units b) 30,000 units c) 62,500 units d) 20,000 units 2) If total demand (volume) is 120,000 units, then the company should Group of answer choices a) select Process B with a profit of $450,000 to maximize profit b) select Process A with a profit of $940,000 to maximize profit c) select Process B with a profit of $690,000 to maximize profit d) select Process A with a profit of $700,000 to maximize profit 3) The Point of Indifference between Process A and Process B occurs at a total cost of $____________ . Group of answer choices a) 4,375,000 b) 1,390,000 c) 3,625,000 d) 125,000
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Related questions
Question
10)
Break-Even Analysis
A company is evaluating which of two alternatives should be used to produce a product that will sell for $35 per unit. The following cost information describes the two alternatives.
|
|
Process A |
Process B |
|
Fixed Cost |
$500,000 |
$750,000 |
|
Variable Cost per Unit |
$25 |
$23 |
1) The breakeven volume for Process B is
Group of answer choices
a) 50,000 units
b) 30,000 units
c) 62,500 units
d) 20,000 units
2) If total demand (volume) is 120,000 units, then the company should
Group of answer choices
a) select Process B with a profit of $450,000 to maximize profit
b) select Process A with a profit of $940,000 to maximize profit
c) select Process B with a profit of $690,000 to maximize profit
d) select Process A with a profit of $700,000 to maximize profit
3) The Point of Indifference between Process A and Process B occurs at a total cost of $____________ .
Group of answer choices
a) 4,375,000
b) 1,390,000
c) 3,625,000
d) 125,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.