Use the breakeven model to determine which of the statements below is TRUE according to the information provided in the table relating to two different locations considered for a new manufacturing facility.LOCATIONANNUAL FIXED COSTS UNIT VARIABLE COSTSSite A$120,000Site B$110,000a.The breakeven point for these two locations is 909 units per yearb Se B is the desired location if the production rate is 1000 units per yearThe breakeven point for these two locations is 625 units per yeard Ste A is the desired location if the production rate is 500 mits per year$18$29

The Break-Even Model in facility location selection involves determining the level of activity at…

Answered: Use the breakeven model to determine…

Principles of Accounting Volume 2

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Chapter3: Cost-volume-profit Analysis

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Problem 7EA: Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per...

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A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location A Location B Monthly Fixed Cost ( $ ) $16000 $34000 Unit variable cost ( $ /unit) (including labor, material and transportation cost) $20 $5 Which one of the the following monthly production volume is closest to the volume where the company would be indifferent between the two locations ? Select one: a. 1320 b. 1200 c. 780 d. 1440
Using location break-even analysis, determine the ideal location for a distribution centre given the information in the table below. We will assume that the price will remain at $2000 for all locations and the quantity for all location is 15,000 Location Fixed cost per year $ Variable cost per year $ Transportation cost $ Location 1 600,000 200 200 Location 2 360,000 150 350 Location 3 900,000 300 100 Location 4 720,000 250 150
A factory to manufacture automobile tires is being considered to be setup in Kuwait. The organization is expecting to manufacture 12044 tires annually. After doing some planning, the manger was able to estimate the following fixed and variable cost in KWD for the three locations under consideration: Location C Fixed Cost 289161 389161 239161 per year Variable 45 30 65 Cost per Unit What will be the total cost for the best location selected based on these costs. [round off to the closest whole number]
A home furnishing company is trying to compare three convenient alternative locations To establish the new factory, and you have data about the expected costs of establishing a new factory As in the following table: (A, B, C) in three governorates: sale price per one variable cost, per unit Annual fixed costs Site ( A ) 30 000 80 130 ( B ) 90 000 50 130 ( C ) 120 000…
A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented below. Which area is the cheapest at 125,000 units? Costs A B C Fixed ($) 2,500,000 2,000,000 3,500,000 Variable ($ per unit) 21 25 15
Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each alternative are given. The MARR is 20% per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on AW. State your assumptions.
E4 Location Breakeven Analysis (also known as cost-volume analysis) is a technique used to make an economic comparison of location alternatives. The fixed and variable costs of three potential locations are listed below: LOCATION FIXDED COST PER ANNUM VARIABLE COST PER UNIT A 40 000 80 B 70 000 65 C 120 000 3 The expected selling price of the product is R 150.00. The company wishes to find the most economical location for an expected volume of 2500 units per year. Plot the costs for each location, with costs on the vertical axis and annual volume on the horizontal axis and identify the location that has the lowest total cost for the expected production volume.
Hyundai Motors is considering three sites-A, B, and C-at which to locate a factory to build its new-model automobile, the Hyundai Sport C150. The goal is to locate at a minimum-cost site, where cost is measured by the annual fixed plus variable costs of production. Hyundai Motors has gathered the following data: Site A B C Annualized Fixed Cost $11,000,000 $20,000,000 $25,000,000 Variable Cost per Auto Produced $2,600 $2,000 $1,000 The firm knows it will produce between 0 and 60,000 Sport C150s at the new plant each year, but, thus far, that is the extent of its knowledge about production plans. a) The value of volume, V, of production above which site C is recommended= 8751 Sport C150s (round your response up to the next whole number). b) The value of volume, V, of production below which site A is recommended=Sport C150s (round your response up to the next whole number).
The Martin-Beck Company operates a plant in St. Louis with an annual capacity of 30,000 units. Product is shipped to regional distribution centers located in Boston, Atlanta, and Houston. Because of an anticipated increase in demand, Martin-Beck plans to increase capacity by constructing a new plant in one or more of the following cities: Detroit, Toledo, Denver, or Kansas City. The estimated annual fixed cost and the annual capacity for the four proposed plants are as follows: Proposed Plant Detroit Toledo Denver Kansas City $175,000 Annual Fixed Cost Annual Capacity 40,000 $300,000 $375,000 $500,000 10,000 20,000 30,000 The company's long-range planning group developed forecasts of the anticipated annual demand at the distribution centers as follows: Distribution Center Annual Demand Boston 30,000 Atlanta 20,000 Houston 20,000
A firm is trying to decide between two location alternatives, Albany and Baltimore. Albany would result in annual fixed costs of $60,000, labor costs of $7 per unit, material costs of $10 per unit, transportation costs of $15 per unit, and revenue per unit of $50. Baltimore would have annual fixed costs of $80,000, labor costs of $6 per unit, material costs of $9 per unit, transportation costs of $14 per unit, and revenue per unit of $48. (A) At an annual volume of 9,000, which would yield the higher profit? (B) At what annual volume would management be indifferent between the two alternatives in terms of annual profits?
Example 5: Potential locations X, Y and Z have the cost structures shown below. The ABC company has a demand of 1,30,000 units of a new product. Three potential locations X, Y and Z having following cost structures shown are available. Select which location is to be selected and also identify the volume ranges where each location is suited? Location X Location Y Location Z Fixed Costs Rs. 150,000 Rs. 350,000 Rs. 950,000 Variable Costs Rs. 10 Rs. 8 Rs. 6
Company XYZ is conducting an engineering economic analysis to decide whether to make vs purchase position for a necessary element needed ins several products. Now the engineering department has established this information: Option A to purchase 10,000 units annually at a fixed price of $8.50 per unit. The cost of placing the order is insignificant as per the present cost accounting procedure. Option B to manufacture 10,000 units annually with a direct labor cost of $1.50 per unit, manufacturing overhead cost is allotted at 200% of direct labor (which is $3.00 per unit) ) and Direct materials cost at $5.00 per unit. Based on the information, should the unit be purchased or manufactured?

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