Power Notebooks, Inc. plans to manufacture a new line of notebook computers. Management is trying to decide whether to purchase the LCD screens for the computers from an outside supplier or to manufacture the screens in-house. The screens cost $100 each from the outside supplier. To set up the assembly process required to produce the screens in-house would cost $100,000. The company could then produce each screen for $25. At what level of output, is the company better off producing LCD screens inhouse vs purchasing it from outside supplier? 2333 1334 1333

Power Notebooks, Inc. plans to manufacture a new line of notebook computers. Management is trying to decide whether to purchase the LCD screens for the computers from an outside supplier or to manufacture the screens in-house. The screens cost $100 each from the outside supplier. To set up the assembly process required to produce the screens in-house would cost $100,000. The company could then produce each screen for $25. At what level of output, is the company better off producing LCD screens inhouse vs purchasing it from outside supplier? 2333 1334 1333

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Lena Lollipops produces lollipops by batch. It has established that there is a certain learning curve pattern that is present in its production. When the very first batch was produced, a total of P2,000 was incurred, of which 50% was for materials and the rest for labor and variable overhead. Overhead was determined to have the same behavior as labor costs. For the third and fourth batches, a total of P2,960 was incurred for production. This sums up their total production cost to P6,560 since they began operations. In this batch, overhead costs equate to one-fourth of total labor costs. Lena Lollipops have already produced 16 batches in total. Candy Man Store placed a large order of 16 additional batches of lollipops to be distributed in their stores. (use 3 decimal places and round-off answers to two decimal places) What is the average cost of labor per batch at a production level of 16 batches? How much would be the total production cost for the order? How much labor cost would be…
Q13
Jim’s Consulting is owned by James Smith. For the past year, Jim’s Consulting had the following revenues and costs → Revenues $600,000 Supplies $20,000 Electricity and water $10,000 Employees’ salaries $300,000 Jim’s salary $250,000 James has the option of shutting down and renting the building he owns for $60,000 per year. Additionally, James could work for a larger consulting house for $275,000 per year. Answer the following: What is Jim’s Consulting’s accounting cost? What is Jim’s Consulting’s economic cost? What is Jim’s Consulting’s economic profit?
H1. Mimi's is developing a Fiery Habanero muffin, which will NOT compete with anything Mimi's currently offers. Unit contribution margin for the new Fiery Habanero muffin would be $3.38. Contribution margin for the company's Banana Nut muffin is $3.25 per unit. Mimi's expects to sell 45,000 units of the new muffin, if it is introduced. Compute weighted contribution margin for the new muffin. (Rounding: penny.)
Paradise Pottery had the following costs in May when production is 800 ceramic pots: materials, $8,700; labor (variable), $2,900; depreciation, $1,100; rent, $900; and other fixed costs, $1,500. If production changes to 900 units, how much will the total variable costs and total fixed costs be, respectively?
Global Corp. sells its output at the market price of $13 per unit. Each plant has the costs shown below Units of Output Total Cost ($) 0 8 1 11 2 17 3 26 4 38 5 53 6 71 7 92 What is the breakeven quantity? Enter 0 if total profit is always negative. Please specify your answer as an integer. What is the breakeven revenue? Enter 0 if total profit is always negative. Please specify your answer as an integer. What is the profit at each plant when operating at its optimal output level? Please specify your answer as an integer. How many units of output should each plant produce? Please specify your answer as an integer.
Please answer question 6 with details on how to do it. Thank you.
AVERAGE TOTAL COST (Dollars per scooter) 800 720 640 560 480 400 320 240 160 80 0 0 100 200 300 400 QUANTITY (Scooters) 500 Range More than 400 scooters per month Fewer than 300 scooters per month Between 300 and 400 scooters per month 600 700 SRATC₁ SRATC₂ SRATC3 LRATC (?) In the following table, indicate whether the long-run average cost curve exhibits economies of scale, constant returns to scale, or diseconomies of scale for each range of scooter production. Economies of Scale Constant Returns to Scale Diseconomies of Scale
You are the marketing manager of the Business Unit (BU) that produces polystyrene (which is an input to making lightweight rigid foam). The current Demand/Supply balance, as measured by the ICIS price, is $800 per ton of polystyrene. The BU has 2 plants and can produce a total of 1800 tons. At full capacity utilization, the BU’s average variable cost equals $1300/t and its average total cost equals $1700/t.Plant 1 has a capacity of 600 tons and a marginal cost of $900/t. Plant 2 has capacity of 1200 tons and a marginal cost of $1500/t. Due to exit of one competitor, you expect next year’s polystyrene ICIS price to increase to $1200. 1. How much volume of polystyrene do you expect to produce next year, if any? 2. What is your expected contribution margin for next year? 3. What is your expected profit for next year?
In a building construction project, 7,500 feet of insulated ductwork is required. The ductwork is made from 14-gauge steel costing $8.50 per pound. The 24-inch-diameter duct weighs 15 pounds per foot. Insulation for the ductwork costs $10 per foot. Engineering design will cost $16,000, and labor to install the ductwork will amount to $180,000. What is the cost of the 14-gauge steel? $956,250 $887,456 $1,200,000 $1,000,000
9
Average Total Cost ($ per tablet) Number of Factories Q=100 Q=200 Q=300 Q=400 Q=500 Q=600 1 400 300 200 240 300 720 540 350 180 160 250 540 3 720 400 170 160 200 360 The company Ride is a major manufacturer of bicycles. Currently the company produces bikes using only one factory. However it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one two or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve of Ride's bikes? Ride experiences economies of scale at any quantity less than 400 bikes. Ride experiences economies of scale at any quantity over 300 bikes. The long-run average total cost of production per bike will be $170 when 300 bikes are produced in the long run. The long-run average total cost of…