A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Hachine Cbst $50,000 $40, 000 $70,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Annual A. 2. Product Demand 1 12,000 21,000 11,000 25,000 2. 2. 4. 4. 2. a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 230 days a year. (Enter total processing times as whole numbers. Round up machinie quantities to the next higher whole number. Compute total purchasing costs using these rounded mechine quantities. Enter the resulting total purchasing cost as a whole number.) Total processing time in minutes per machine C. Number of each machine needed and total purchasing cost 100.000 140 000 2 of the A machines C. Buy b. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $13 each, B machines have an hourly operating cost of $15 each, and C machines have an hourly operating cost of $15 each. What would be the total cost associated with each machine option, including both the initial purchasing cost and the annual operating cost incurred to satisfy demand?(Use rounded machine quantities from Part a. Do not round any other intermediste calculations. Round your final answers to the nearest whole number.) Total cost for each machine 188.000 Buy A.
A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Hachine Cbst $50,000 $40, 000 $70,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Annual A. 2. Product Demand 1 12,000 21,000 11,000 25,000 2. 2. 4. 4. 2. a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 230 days a year. (Enter total processing times as whole numbers. Round up machinie quantities to the next higher whole number. Compute total purchasing costs using these rounded mechine quantities. Enter the resulting total purchasing cost as a whole number.) Total processing time in minutes per machine C. Number of each machine needed and total purchasing cost 100.000 140 000 2 of the A machines C. Buy b. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $13 each, B machines have an hourly operating cost of $15 each, and C machines have an hourly operating cost of $15 each. What would be the total cost associated with each machine option, including both the initial purchasing cost and the annual operating cost incurred to satisfy demand?(Use rounded machine quantities from Part a. Do not round any other intermediste calculations. Round your final answers to the nearest whole number.) Total cost for each machine 188.000 Buy A.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows
Machine
Cost
$50,00e
$40,000
$70,000
A.
Product forecasts and processing times on the machines are as follows:
PROCCESSING TIME PER
UNIT (minutes)
Annua)
Product Demand
12,000
21,000
11,000
25,000
A.
2.
1.
2.
2
2.
2.
a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to
meet demand, how many of each machine type would be needed, end the resulting total purchasing cost for each machine type. The
machines will operate 10 hours a day, 230 days a year. (Enter total processing times as whole numbers. Round up machine
quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quentities. Enter the
resulting total purchasing cost as a whole number.)
Total processing
time in minutes
per machine
B.
C.
Number of each machine needed and
total purchasing cost
A.
100,000
B.
C.
140.000
Buy
2 of the A machines.
b. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly
operating cost of $13 each, B machines have an hourly operating cost of $15 each, and C machines have an hourly operating cost of
$15 each. What would be the total cost associated with each machine option, including both the initial purchasing cost and the annual
operating cost incurred to satisfy demand?(Use rounded machine quantities from Part a. Do not round any other intermediste
calculations. Round your final answers to the nearest whole number.)
Total cost for each machine
A
188,000
Buy
A.
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