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Recommended: graph each alternative with units on the x-axis and $ on the y-axis. Also, include revenue on the chart. Identify the break-even points and points of indifference. For help on this, see the video posted in Moodle. When comparing Alternative B to Alternative C, C is the most attractive option above units. DO NOT INCLUDE A COMMA. Round your answer to the nearest whole number and do not include units or a comma. For example, submit 12450 and NOT 12,450.

Recommended: graph each alternative with units on the x-axis and $ on the y-axis. Also, include revenue on the chart. Identify the break-even points and points of indifference. For help on this, see the video posted in Moodle. When comparing Alternative B to Alternative C, C is the most attractive option above units. DO NOT INCLUDE A COMMA. Round your answer to the nearest whole number and do not include units or a comma. For example, submit 12450 and NOT 12,450.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An operations manager is deciding on the level of automation for a new process. The fixed cost for automation includes the equipment purchase price, installation, and initial spare parts. The variable costs per unit for each level of automation are primarily labor related. Each unit can be sold for $90. As in many cases, you have the default alternative of doing nothing ($0 fixed cost, $0 variable costs). Hint: For these questions, also consider the "Do Nothing" option as a viable option when making your decision. Alternative Fixed Costs A B C $100,000 $268,000 $560,000 Variable Costs per Unit $54 $30 $20 Recommended: graph each alternative with units on the x-axis and $ on the y-axis. Also, include revenue on the chart. Identify the break-even points and points of indifference. For help on this, see the video posted in Moodle. When comparing Alternative B to Alternative C, C is the most attractive option above units. DO NOT INCLUDE A COMMA. Round your answer to the nearest whole number and do not include units or a comma. For example, submit 12450 and NOT 12,450.
Transcribed Image Text:An operations manager is deciding on the level of automation for a new process. The fixed cost for automation includes the equipment purchase price, installation, and initial spare parts. The variable costs per unit for each level of automation are primarily labor related. Each unit can be sold for $90. As in many cases, you have the default alternative of doing nothing ($0 fixed cost, $0 variable costs). Hint: For these questions, also consider the "Do Nothing" option as a viable option when making your decision. Alternative Fixed Costs A B C $100,000 $268,000 $560,000 Variable Costs per Unit $54 $30 $20 Recommended: graph each alternative with units on the x-axis and $ on the y-axis. Also, include revenue on the chart. Identify the break-even points and points of indifference. For help on this, see the video posted in Moodle. When comparing Alternative B to Alternative C, C is the most attractive option above units. DO NOT INCLUDE A COMMA. Round your answer to the nearest whole number and do not include units or a comma. For example, submit 12450 and NOT 12,450.
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