A manager must decide which type of machine to buy: A, B or C. Machine fixed costs are: MachineCost/yearA$50,000B$60,000C$90,000 The company makes 4 products. Product forecasts and unit processing times on each machines are as follows: Processing time / unit (mins)ProductForecastsABC120000342215000443310000564440000221 How many machines of each type would be needed to meet annual demand for all the products?Based on annual fixed costs, which type of machine will cost the least to satisfy the demand? (machines operate 10 hours a day, 250 days a year)

Under a capital budgeting process, a business selects that alternative or course of action which…

Answered: A manager must decide which type of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A manager must decide which type of machine to buy: A, B or C. Machine fixed costs are:

Machine	Cost/year
A	$50,000
B	$60,000
C	$90,000

The company makes 4 products. Product forecasts and unit processing times on each machines are as follows:

		Processing time / unit (mins)
Product	Forecasts	A	B	C
1	20000	3	4	2
2	15000	4	4	3
3	10000	5	6	4
4	40000	2	2	1

How many machines of each type would be needed to meet annual demand for all the products?
Based on annual fixed costs, which type of machine will cost the least to satisfy the demand? (machines operate 10 hours a day, 250 days a year)

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