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The rank of product lines from lowest to highest in terms of
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Answer to Problem 139P
The correct option is
Explanation of Solution
Given:
Data | Line 1 | Line 2 | Line 3 | Line 3 |
Annual production | ||||
Cost of direct materials | ||||
Cost of direct labor |
Calculation:
Write the expression to calculate the direct cost of product lines.
Here, the direct cost is DC.
Substitute
Substitute
Substitute
Substitute
Write the expression to calculate total cost for line 1.
Here, the total cost is TC.
Substitute
Write the expression to calculate the manufacturing cost per unit for line 1.
Here, the average cost is AC.
Substitute,
Write the expression to calculate total cost for line 2.
Substitute
Write the expression to calculate the manufacturing cost per unit for line 2.
Substitute
Write the expression to calculate total cost for line 3.
Substitute
Write the expression to calculate the manufacturing cost per unit for line 3.
Substitute
Write the expression to calculate total cost for line 4.
Substitute
Write the expression to calculate the manufacturing cost per unit for line 4.
Substitute
The product lines are ranked on the basis of average cost from lowest to highest.
Conclusion:
Therefore, the correct option is
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Chapter D Solutions
ENGR.ECONOMIC ANALYSIS
- Suppose there is a new preventative treatment for a common disease. If you take the preventative treatment, it reduces the average amount of time you spend sick by 10%. The optimal combination of Z (home goods) and H (health goods). both may increase both may increase or one may stay the same while the other increases. both may decrease H may increase; Z may not change Z may increase; H may decreasearrow_forwardIn the Bismarck system,. may arise. neither selection both adverse and risk selection ☑ adverse selection risk selectionarrow_forwardPls fill out/explain to me these notes and explanations, thanksarrow_forward
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