Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Question
Chapter 8, Problem 5P
(a):
To determine
Calculate the break-even point.
(b):
To determine
Calculate the same operating income.
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Your friend Claire has been designing her own hoodies and giving them as gifts to friends and family. She has decided to sell them online soon by using a 3rd party website with a service surcharge based on her pricing. Using the information below, what is the relationship between Claire's selling price per hoodie and profit margin? (Please plot a graph dipcting the relationship)
Costs ($)
Base Hoodie Cost
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Selling Website Service Charge
5%
Your friend Claire has been designing her own hoodies and giving them as gifts to friends and family. She has decided to sell them online soon by using a 3rd party website with a service surcharge based on her pricing. Using the information below, what is relationship between Claire's selling price per hoodie and profit margin? (Please choose from the image options presented, otherwise feel free to plot a graph of your own)
Costs ($)
Base Hoodie Cost
$30
Craft Supplies to Design
$10
Selling Website Service Charge
5%
Paccar Winch makes winch components for its different product lines. The firm operates its production facility three hundred and five days per year. It has orders for about twelve thousand winch components per year and has the capability of producing one hundred and five per day. Setting up the winch production costs fifty five dollars. The cost of each winch component is one dollar and ten cents. The holding cost is fifteen cents per winch component per year.
a) What is the optimal size of the production run?
b) What is the average holding cost per year?
c) What is the average setup cost per year?
d) What is the total cost per year, including the cost of the winch components?
Chapter 8 Solutions
Contemporary Engineering Economics (6th Edition)
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