A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows:Number ofMachinesTotal AnnualFixed CostsCorrespondingRange of Output1 $ 9,600 0 to 3002 15,000 301 to 6003 20,000 601 to 900Variable cost is $10 per unit, and revenue is $40 per unit.a. Determine the break-even point for each range.b. If projected annual demand is between 580 and 660 units, how many machines shouldthe manager purchase?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
A manager has the option of purchasing one, two, or three machines. Fixed costs and potential volumes are as follows:
Number of
Machines
Total Annual
Fixed Costs
Corresponding
Range of Output
1 $ 9,600 0 to 300
2 15,000 301 to 600
3 20,000 601 to 900
Variable cost is $10 per unit, and revenue is $40 per unit.
a. Determine the break-even point for each range.
b. If projected annual demand is between 580 and 660 units, how many machines should
the manager purchase?
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