question archive You have to decide which of two machine- Automatic or Manual, to purchase
You have to decide which of two machine- Automatic or Manual, to purchase
Subject:ManagementPrice: Bought3
You have to decide which of two machine- Automatic or Manual, to purchase.
The information about the machines is the following:
Automatic Machine- Fixed costs (Interest, insurance, maintenance, ctc.) total $100,000. The labour and material costs for manufacturing a shaft, are $10.2/Unit and $15.6/Unit, respectively.
Manual Machine- Fixed costs (lnterest, insurance, maintenance, etc.) total $70,000. The labour and material costs for manufacturing the shaft are $16.0/Unit and $18.5/Unit.
-What is the point of indifference (break-even-point) for the two machines?
-If the demand for the 500mm Block is 3800 units/year, which machine should you buy? Why?
-Engineering Services Inc. offers to sell you the block for S65.0/Unit for any quantity you require.
-For what level of demand would you rather buy the block, instead of purchasing any of the above machines and manufacture the shaft in house?
-Sum-up your choice for alternatives, according to the demand quantity. List the quantity range for cach alternative (Buy, Purchase Manual, Purchase Automatic)
Please show your work an explain how you got the answer as this is a practice question I have to study for my exam
