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Practical Management Science

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Your startup company is considering manufacturing 5,000 units annually of a simple but important
component for an aerospace contractor. With your existing resources, you priced the startup tooling to
cost $1,000, and the cost to produce each unit will be $1.50.
Alternatively, you can purchase an automated system for $15,000 which will reduce the cost per unit to
$0.50.
Neglecting interest, the breakeven point (years) is most nearly:
2.8
3.6
15.0
never

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Concord, Inc. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $12, while the cost of assembling each unit is estimated at $14. Unassembled units can be sold for $59, while assembled units could be sold for $65 per unit. What decision should Concord make? Process further; the company will save $8 per unit. Sell before assembly; the company will save $8 per unit. Sell before assembly; the company will save $4 per unit. Process further; the company will save $6 per unit.
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