Problem 5-4 (Algo) A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $36,000 for A and $35,000 for B; variable costs per unit would be $7 for A and $11 for B; and revenue per unit would be $20. a. Determine each alternative's break-even point in units. (Round your answer to the nearest whole amount.) QBEPA QBEP,B b. At what volume of output would the two alternatives yield the same profit (or loss)? (Round your answer to the nearest whole amount.) units units units Higher profit c. If expected annual demand is 16,000 units, which alternative would yield the higher profit (or the lower loss)?
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- The gas division of Power-U-Up plans to introduce a new gas delivery system based on the following accounting information. Fixed costs per period are $4 236; variable cost per unit is $168; selling price per unit is $211; and capacity per period is 450 units. Determine the break-even point as a percent of capacity if fixed costs are increases to $5 577 and variable costs are reduced to 75% of the selling price. Question 3 options: 23.56% 24.24% 27.21% 21.24%J 1 ue K Beth Zion Hospital has received initial certification from the state of California to become a center for liver transplants. The hospital, however, must complete its first 10 transplants under great scrutiny and at no cost to the patients with the hospital picking the expenses. The cost per hour of surgery is estimated to be $5,000. The very first transplant, just completed, required 27 hours. On the basis of research at the hospital, Beth Zion estimates that it will have an 75% learning curve. Using Table E.3, estimate the time it will take to complete: a) the 10th transplant hours (round your response to two decimal places). Learning Curve Coefficients Unit Number (N) 10 Unit Time .385 75% Total Time 5.589 Unit Time .477 80% Total Time 6.315 Unit Time .583 85% Total Time 7.116 X4.1 Lupane State University’s business program has the facilities and faculty to handle an enrolment of 2000new students per semester. However, in an effort to limit class sizes to a reasonable level under 200 handlean enrolment of 2000 new students per semester (generally). Lupane State University dean placed a ceiling one enrolment of 1500 new students although there wasample demand for business courses last year conflicting schedules allowed only 1450 new students totake business courses. Calculate the utilisation and efficiency off the system. 4.2 Under ideal conditions, a service bay at a Fast Lube can save 6 cars per hour. The effective capacity andefficiency of the Fast Lube service bay are known to be 5.5 and 0.880, respectively. What is the minimumnumber of service bays Fast Lube needs to achieve an anticipated servicing of 200 cars per 8-hour day.4.3 Suggest measures that can be adopted by Lupane State University to improve their efficiency.
- Problems 1. Joe's Tasty Burger has determined that its production facility has a design capacity of 400 hamburgers per day. The effective capacity, however, is 250 hamburgers per day. Lately Joe has noticed that output has been 300 hamburgers per day. Compute both design and effective capacity utilization measures. What can you conclude?what is capacity strategy formulation?Distinguish between design capacity and effective capacity. Provide a brief example.
- 11. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine A B C Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product 1 2 3 4 Cost $40,000 $30,000 $80,000 Annual Demand 16,000 12,000 6,000 30,000 A 3452 2 B 4 4 6 2 C 2 3 4 1 a. Assume that only purchasing costs are being considered. Which machine would have the low- est total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year. b. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $10 each, B machines have an hourly oper- ating cost of $11 each, and C machines have an hourly operating cost of $12 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying capacity processing requirements?The effective capacity and efficiency for the next quarter at MMU Mfg. in Waco, Texas, for each of three depart-ments are shown: DEPARTMENT EFFECTIVE CAPACITY RECENT EFFICIENCYDesign 93,600 .95Fabrication 156,000 1.03Finishing 62,400 1.05Compute the expected production for next quarter for eachdepartment.What is CAPACITY REQUIREMENTS FORECASTING?
- ••• 1.9 Brown’s, a local bakery, is worried about increased costs—particularly energy. Last year’s records can provide a fairly good estimate of the parameters for this year. Wende Brown, the owner, does not believe things have changed much, but she did invest an additional $3,000 for modifications to the bakery’s ovens to make them more energy-efficient. The modifications were supposed to make the ovens at least 15% more efficient. Brown has asked you to check the energy savings of the new ovens and also to look over other measures of the bakery’s productivity to see if the modifications were beneficial. You have the following data to work with: the data as per below-attached image6. Optimal Production For the three standard products (A, B and C) a machine is necessary. Its capacity is limited to 1.500 machine hours. The following table shows the max production per product and its machine time in use. Capacity (min) max. amount of production (piece) A 15 3.500 B 5 3.000 с 8 5.000 Furthermore, product A and B show a contribution margin of € 5,- per piece, while product C shows a CM of only € 2,-. Required: What is the optimal program of production (follow the in-class exercise for wedding cakes (relative CM)).As part of their application for a loan to buy Lakeside Farm, a property they hope to develop as a bed-and-breakfast operation, the prospective owners have projected: Monthly fixed cost (loan payment, taxes, insurance, maintenance) $6000 Variable cost per occupied room per night $ 20 Revenue per occupied room per night $ 75 Question: Suppose 5 rooms can be sold per night, how much they should charge per night in order to break even?