The Ecology Group wishes to purchase a piece of equipment for various metals recycling. Machine 1 costs $123,000, has a life of 10years, has an AOC of $5,000, and requires one operator at a cost of $24 per hour to process 16 tons per hour. Machine 2 costs$70,000, has a life of 6 years, has an AOC of $2,500, and requires two operators at a cost of $26 per hour for each operator toprocess 6 tons per hour. Determine the breakeven tonnage of scrap metal at /= 7% per year and select the better machine for aprocessing level of 1,000 tons per year.The breakeven tonnage of scrap metal isSAmachine 1tons, and the better machine for a processing level of 1000 tons per year is

Break-even amount or break-even of units is where the business hopes to create neither benefits nor…

Answered: The Ecology Group wishes to purchase a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown: Site Fixed Cost Per Year Variable Cost per Unit 1 $700 $11.00 2 $1,200 $6.00 3 $2,100 $4.00 Part 2 a) After rounding to the nearest whole number, site 1 is best below ▼ 0 450 100 units.
Leroy purchased an Al-based robotics system with the first cost of $345,000, an AOC of $148,000 per year, a $140,000 salvage value, and an ESL of3 years. Rather than trading after 3 years, he kept the system for a total of 5 years. Due to the wear factor and expense of repairs, its AOC Increased to $360,000 per year starting in year 4, plus the salvage value went to zero. At i= 10% per year, what is the percentage increase in the AW of costs that Leroy experienced? The percentage increase in the AW of costs that Leroy experienced is %.
Based on a predicted level of production and sales of 16,000 units, a company anticipates total variable costs of $78,400, fixed costs of $27,200, and operating income of $34,080. Based on this information, the budgeted amount of variable costs for 13,000 units would be: A) $165,192 B) $27,200 C) $61,280 D) $63,700 E) $78,400
A suburban lawn-care company has nonincremental fixed costs of $6,000 per month. It currently services 400 lawns per month at an average price of $30 per lawn. The company’s variable costs are $15 per lawn. If the company’s total sales increase beyond 550 lawns per month (i.e., 150 more lawns than are currently serviced), new equipment would have to be purchased that would involve incremental fixed costs of $760 per month. (a) Calculate the breakeven sales level for a $5 per lawn price increase. Show your work. (b) Calculate the breakeven sales level for a $5 per lawn price decrease. Show your work. (Hint: consider the possibility of incremental fixed costs.) (c) Data from past price changes indicates that the company can expect a price elasticity of –1.2. Based on this price elasticity, calculate the unit sales change that the company could expect from a $5 price increase. Then calculate the unit sales change that the company could expect from a $5 price decrease. Show…
None
The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the revenue and cost schedules shown in the spreadsheet that follows: A template for the spreadsheet is provided in the Course Materials. You may download my template or create your own. Since we are using dollars and cents, be sure to go out two decimal places on your calculations. Add columns to show, respectively, marginal cost (MC), marginal revenue (MR), and total profit. Use the appropriate formulas to create two new columns (7 and 8) for total profit and profit margin, respectively. What is the maximum profit the EI Dorado Star can earn? What is the maximum possible profit margin? Are profit and profit margin maximized at the same point on…
An aluminum extrusion plant manufactures a particular product at a variable cost of $0.04 per unit, including material cost. The fixed costs associated with manufacturing the product equal $30,000/year. Determine the break-even value for annual sales if the selling price per unit is (a) $0.40, (b) $0.30, and (c) $0.20.
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Smith Manufacturing is a major player in the lawn sprinkler business. Their high-end sprinkler is used commercially and is quite popular with golf course greens keepers. In producing these sprinklers Smith’s fixed cost (CF) is $50,000 per month with a variable cost (cv) of $10 per unit. The selling price for these high-end sprinklers is described by the equation p=$90 – 0.2(D). a) What is the optimal volume of sprinklers? b) Does Smith make a profit at that volume? Thank you.
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Revcon Products has two subcontractor bids to automate a composite winding process. Process A will have fixed costs of $42,000 per year and will require two workers at $80 per day each. Together, these workers can generate 100 units. Process B will have fixed costs of $56,000 per year, but with this process, three workers will generate 200 units of product. If x is the number of units, the variable cost (VC) per year for B is best represented as: (a) VC per Year = [2(80)/100]x (b) VC per Year = [3(80)/200]x (c) VC per Year = [3(80)/200]x + 56,000 (d ) VC per Year = [2(80)/100]x + 42,000
The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the revenue and cost schedules shown in the spreadsheet that follows: A template for the spreadsheet is provided in the Course Materials. You may download my template or create your own. Since we are using dollars and cents, be sure to go out two decimal places on your calculations. Add columns to show, respectively, marginal cost (MC), marginal revenue (MR), and total profit. Create a new spreadsheet in which total fixed cost increases to $5,000. What price should the manager charge? How many papers should be sold in the short run?

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