EP PRIN.OF OPERATIONS MGMT.-MYOMLAB
10th Edition
ISBN: 9780134183848
Author: HEIZER
Publisher: PEARSON CO
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 7, Problem 12P
Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $65,000, and for proposal B, $34,000. The variable cost for A is $10, and for B, $14. The revenue generated by each unit is $18.
a) What is the crossover point in units for the two options?
b) At an expected volume of 8.300 units, which alternative should be chosen?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The owner of Old-Fashioned Berry Pies, S. Simon, is contemplating adding a
new line of pies, which will require leasing new equipment for a monthly
payment of $6,000. Variable costs would be $2 per pie, and pies would retail
for $7 each.
a.
How many pies must be sold in order to break even?
b.
What would the profit (loss) be if 1,000 pies are made and sold in a month?
How many pies must be sold to realize a profit of $4,000?
С.
d.
If 2,000 can be sold, and a profit target is $5,000, what price should be charged per pie?
5-30
Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $65,000, and for proposal B, $34,000. The variable cost for A is $10, and for B, $14. The revenue generated by each unit is $18.a) What is the crossover point in units for the two o ptions?b) At an expected volume of8,300 units, which alternative shouldbe chosen?
A firewood manufacturer is considering buying a hydraulic wood splitter which sells for $60,000. He figures
it will cost an additional $170 per cord to purchase and split wood with this machine, while he can sell each
cord of split wood for $200. For this machine, design capacity is 50 cords per day, effective capacity is 40
cords per day, and actual output is anticipated to be 35 cords per day.
a) What would its efficiency be?
b) How many cords of wood would he have to split with this machine to break even?
c) What would the potential profit be if he were to split 4,000 cords of wood with
this machine?
d) How many cords of wood would he have to split with this machine to make a
profit of $50,000?
Chapter 7 Solutions
EP PRIN.OF OPERATIONS MGMT.-MYOMLAB
Ch. 7.S - Prob. 1DQCh. 7.S - Prob. 2DQCh. 7.S - Prob. 3DQCh. 7.S - Prob. 4DQCh. 7.S - Prob. 5DQCh. 7.S - Distinguish between bottleneck time and throughput...Ch. 7.S - Prob. 7DQCh. 7.S - Prob. 8DQCh. 7.S - Prob. 9DQCh. 7.S - Prob. 10DQ
Ch. 7.S - Prob. 11DQCh. 7.S - Prob. 12DQCh. 7.S - What are the techniques available to operations...Ch. 7.S - Amy Xias plant was designed to produce 7,000...Ch. 7.S - For the post month, the plant in Problem S7.1,...Ch. 7.S - Prob. 3PCh. 7.S - Prob. 4PCh. 7.S - Prob. 5PCh. 7.S - The effective capacity and efficiency for the next...Ch. 7.S - Southeastern Oklahoma State Universitys business...Ch. 7.S - Prob. 8PCh. 7.S - Prob. 9PCh. 7.S - Prob. 10PCh. 7.S - The three-station work cell illustrated in Figure...Ch. 7.S - The three-station work cell at Pullman Mfg., Inc....Ch. 7.S - The Pullman Mfg., Inc., three-station work cell...Ch. 7.S - Prob. 14PCh. 7.S - 10 minutes per unit. Part 2 is simultaneously...Ch. 7.S - Prob. 16PCh. 7.S - Prob. 17PCh. 7.S - Using the data in Problem S7.17: a) What is the...Ch. 7.S - Prob. 19PCh. 7.S - Prob. 20PCh. 7.S - Prob. 21PCh. 7.S - Prob. 22PCh. 7.S - Prob. 23PCh. 7.S - Prob. 24PCh. 7.S - Prob. 25PCh. 7.S - Prob. 26PCh. 7.S - Prob. 27PCh. 7.S - Prob. 32PCh. 7.S - Prob. 33PCh. 7.S - Prob. 34PCh. 7.S - Prob. 35PCh. 7.S - Prob. 36PCh. 7.S - Prob. 37PCh. 7.S - Prob. 38PCh. 7.S - Prob. 39PCh. 7.S - Prob. 1VCCh. 7.S - a capacity expansion plan and a new 11-story...Ch. 7.S - a capacity expansion plan and a new 11-story...Ch. 7 - Ethical Dilemma For the sake of efficiency and...Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Prob. 15DQCh. 7 - Prob. 16DQCh. 7 - Prob. 17DQCh. 7 - Prob. 18DQCh. 7 - Prob. 19DQCh. 7 - Prob. 1PCh. 7 - Usingthedatain Problem 7.1, determinethemost...Ch. 7 - Prob. 3PCh. 7 - Refer to Problem 7.1. If a contract for the second...Ch. 7 - Stan Fawcetts company is considering producing a...Ch. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Metters Cabinets, Inc., needs to choose a...Ch. 7 - Prob. 10PCh. 7 - Nagle Electric. Inc., of Lincoln, Nebraska, must...Ch. 7 - Stapleton Manufacturing intends to increase...Ch. 7 - Prepare a flowchart for one of the following: a)...Ch. 7 - Prepare a process chart for one of the activities...Ch. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 1CSCh. 7 - Prob. 2CSCh. 7 - Prob. 3CSCh. 7 - Process Strategy at Wheeled Coach Wheeled Coach,...Ch. 7 - Prob. 1.2VCCh. 7 - Prob. 1.3VCCh. 7 - Prob. 1.4VCCh. 7 - Alaska Airlines: 20-Minute Baggage...Ch. 7 - Prob. 2.2VCCh. 7 - Prob. 2.3VCCh. 7 - Prob. 2.4VCCh. 7 - Prob. 2.5VCCh. 7 - Prob. 3.1VCCh. 7 - Prob. 3.2VCCh. 7 - Prob. 3.3VCCh. 7 - Prob. 3.4VC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- The owner of Old-Fashioned Berry Pies, S. Simon, is contemplating adding a new line ofpies, which will require leasing new equipment for a monthly payment of $6,000. Variablecosts would be $2 per pie, and pies would retail for $7 each.a. How many pies must be sold in order to break even?b. What would the profit (loss) be if 1,000 pies are made and sold in a month?c. How many pies must be sold to realize a profit of $4,000?d. If 2,000 can be sold, and a profit target is $5,000, what price should be charged per pie?arrow_forwardHow does product mix affect capacity planning?arrow_forwardA biotech firm is considering abandoning its old plant, built 23 years ago, andconstructing a new facility that has 50% more square footage. The original cost of the old facility was $300,000, and its capacity in terms of standardizedproduction units is 250,000 units per year. The capacity of the new laboratoryis to be 400,000 units per year. During the past 23 years, costs of laboratoryconstruction have risen by an average of 5% per year. If the cost-capacity factor, based on square footage, is 0.80, what is the estimated cost of the newlaboratory?arrow_forward
- Northeast Pennsylvania Manufacturing Company has purchased a certain component part from Wilkes Part Company for $80 per part. Recently, improvements in operations and reduce product demand have cleared up in some сарacity Northeast Pennsylvania Manufacturing's own plant for producing component parts. The particular part could be produced at $50 per part, with a fixed cost of $200,000. As another alternative, a new supplier, Scranton Part Company, is offering volume discounts for new customers of $90 per part for the first 1,600 parts ordered and $70 per part for each additional unit ordered. At what volume would each of the alternatives be preferred?arrow_forwardA small firm intends to increase the capacity of a bottleneck operation by adding a new machine.Two alternatives, A and B, have been identified, and the associated costs and revenues have beenestimated. Annual fixed costs would be $40,000 for A and $30,000 for B; variable costs per unitwould be $10 for A and $11 for B; and revenue per unit would be $15.c. If expected annual demand is 12,000 units, which alternative would yield the higher profit?arrow_forwardsomeone solve this question but do not use excel for this questionarrow_forward
- Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $55,000, and for proposal B, $33,000. The variable cost for A is $9, and for B, $14. The revenue generated by each unit is $18. a) What is the crossover point for the two options? The crossover point for the two options is units. (Round your response to the nearest whole number.) b) At an expected volume of 6,200 units, which alternative should be chosen? The profit (loss) if proposal A is accepted and 6,200 units are produced is $ (Round your response to the nearest dollar and include a minus sign if necessary.) The profit (loss) if proposal B is accepted and 6,200 units are produced is $ (Round your response to the nearest dollar and include a minus sign if necessary.) should be chosen at an expected volume of 6,200 units.arrow_forwardA newly opened bed-and-breakfast projects the following: Monthly fixed costs Variable cost per occupied room per night $60 Revenue per occupied room per night $165 $8000 How many rooms would have to be occupied per month in order to break even?arrow_forwardThe Rosemarie Cosmetic company has a warehouse of 20 high pallet racks serviced by counter-balanced fork trucks. The aisles between racks are 12 feet wide. Storage space has become a premium with new product lines being added. A warehouse expansion is currently being planned. QUESTION How can the warehouse handling system be improved without expanding the warehouse?arrow_forward
- A manufacturer plans to introduce a new shirt based on the following information. The selling price is $57.00; variable cost per unit is $18.00; fixed costs are $7800.00; and capacity per period is 500 units. b) Draw a detailed break-even chart, making sure to label the variables on the y- and x-axes, as well as all other significant points in the chart c) Showing your calculations, calculate the break-even point (in units) if fixed costs are reduced to $7020arrow_forwardSoutheastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $136 for the one-way flight. An average of 81 passengers are on each flight. The variable cost of a filled seat is $23. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $195 or bookings within 1 week of the flight. He estimates that the airline will sell 66 seats at the lower price and 33 at the higher price. Variable cost will not change. 1. Total $ contribution in the single price approach is ? (enter your response as a whole number). 2. Total $ contribution in the two price points approach is ? (enter your response as a whole number). 3.Which approach is preferable to Mr. Eziz? A.Proposed model−two price points OR B. Current Model - Single pricearrow_forwardSoutheastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $142 for the one-way flight. An average of 79 passengers are on each flight. The variable cost of a filled seat is $26. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $187 for bookings within 1 week of the flight. He estimates that the airline will sell 67 seats at the lower price and 34 at the higher price. Variable cost will not change. Total S contribution in the single price approach is $ (enter your response as a whole number). Total S contribution in the two price points approach is $ (enter your response as a whole number). Which approach is preferable to Mr. Eziz? O A. Proposed model - two price points O B. Current model - single pricearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY