Question #6: The McLaren car factory is scaling up production so they can sell 2,000 MP4 model sports cars a year. They assembly team does only one shift a day for 12 hours, but for 280 days of the year (no weekends or holidays). During that time, they power (lights on, machine running, etc.) only during shift work at $0.10 per KWh. Total parts for each car costs $200,000, and the labor costs are $100,000 per laborer (yearly salary) for 150 assembly laborers. The factory floor costs $150/square meter and is 800 square meters for all 20 manufacturing stations. Each station draws an average of 5 kW per hour of operation. USE THE TABLE BELOW: What are the variable costs? (show below) What are the fixed costs? (show below) Which one is a primary cost driver? What price of vehicle would make the factory break even (if all other costs were accounted for in other stockholder share methods)? Variable Costs Cost per unit Total Cost Fixed Costs Price of the car
Question #6: The McLaren car factory is scaling up production so they can sell 2,000 MP4 model sports cars a year. They assembly team does only one shift a day for 12 hours, but for 280 days of the year (no weekends or holidays). During that time, they power (lights on, machine running, etc.) only during shift work at $0.10 per KWh. Total parts for each car costs $200,000, and the labor costs are $100,000 per laborer (yearly salary) for 150 assembly laborers. The factory floor costs $150/square meter and is 800 square meters for all 20 manufacturing stations. Each station draws an average of 5 kW per hour of operation. USE THE TABLE BELOW: What are the variable costs? (show below) What are the fixed costs? (show below) Which one is a primary cost driver? What price of vehicle would make the factory break even (if all other costs were accounted for in other stockholder share methods)? Variable Costs Cost per unit Total Cost Fixed Costs Price of the car
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Subject: Engineering Economics
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Transcribed Image Text:Question #6:
The McLaren car factory is scaling up production so they can sell 2,000 MP4 model sports cars a
year. They assembly team does only one shift a day for 12 hours, but for 280 days of the year
(no weekends or holidays). During that time, they power (lights on, machine running, etc.) only
during shift work at $0.10 per KWh. Total parts for each car costs $200,000, and the labor costs
are $100,000 per laborer (yearly salary) for 150 assembly laborers. The factory floor costs
$150/square meter and is 800 square meters for all 20 manufacturing stations. Each station
draws an average of 5 kW per hour of operation.
USE THE TABLE BELOW:
What are the variable costs? (show below) What are the fixed costs? (show below)
Which one is a primary cost driver?
What price of vehicle would make the factory break even (if all other costs were accounted
for in other stockholder share methods)?
Variable Costs
Cost per unit Total Cost
Fixed Costs
Price of the car
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