Nagle Electric, Inc., of Lincoln, Nebraska, must replace a robotic Mig welder and is evaluating two alternatives. Machine A has a fixed cost for the first year of $72,000 and a variable cost of $20, with a capacity of 22,000 units per year. Machine B is slower, with a speed of one-half of A's, but the fixed cost is only $63,000. The variable cost will be higher, at $24 per unit. Each unit is expected to sell for $34. a) What is the crossover point (point of indifference) for the two machines? The crossover point for the two machines is_____
Nagle Electric, Inc., of Lincoln, Nebraska, must replace a robotic Mig welder and is evaluating two alternatives. Machine A has a fixed cost for the first year of $72,000 and a variable cost of $20, with a capacity of 22,000 units per year. Machine B is slower, with a speed of one-half of A's, but the fixed cost is only $63,000. The variable cost will be higher, at $24 per unit. Each unit is expected to sell for $34. a) What is the crossover point (point of indifference) for the two machines? The crossover point for the two machines is_____
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter15: Decision Analysis
Section: Chapter Questions
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Nagle Electric, Inc., of Lincoln, Nebraska, must replace a robotic Mig welder and is evaluating two alternatives. Machine A has a fixed cost for the first year of $72,000 and a variable cost of $20, with a capacity of 22,000 units per year. Machine B is slower, with a speed of one-half of A's, but the fixed cost is only $63,000. The variable cost will be higher, at $24 per unit. Each unit is expected to sell for $34.
a) What is the crossover point (point of indifference) for the two machines?
The crossover point for the two machines is_______
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