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 $83,000 and a variable cost of $13, with a capacity of 16,000 units per year. Machine B is slower, with a speed of one-half of A's, but the fixed cost is only $58,000. The variable cost will be higher, at $18 per unit. Each unit is expected to sell for $23. a) What is the crossover point (point of indifference) for the two machines? The crossover point for the two machines is units. (Round your response to the nearest whole number.)
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 $83,000 and a variable cost of $13, with a capacity of 16,000 units per year. Machine B is slower, with a speed of one-half of A's, but the fixed cost is only $58,000. The variable cost will be higher, at $18 per unit. Each unit is expected to sell for $23. a) What is the crossover point (point of indifference) for the two machines? The crossover point for the two machines is units. (Round your response to the nearest whole number.)
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...
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