Nagle Electric Inc Of Lincoln Nebraska Must Replace A Robotic Mig Welder And Is Evaluating Two Alternatives Machin 1 (111.6 KiB) Viewed 60 times
Nagle Electric, Inc., of Lincoln, Nebraska, must replace a robotic Mig welder and is evaluating two alternatives. Machine A has a fixed cost for the first year of $90,000 and a variable cost of $18, with a capacity of 12,000 units per year. Machine B is slower, with a speed of one-half of A's, but the fixed cost is only $50,000. The variable cost will be higher, at $22 per unit. Each unit is expected to sell for $29.
a) What is the crossover point (point of indifference) for the two machines? The crossover point for the two machines is 5,750 units. (Round your response to the nearest whole number.) b) What is the range of units for which machine A is preferable? Machine A is preferable at a level of production above 5,750 units. (Enter your response as a whole number.) c) What is the range of units for which machine B is preferable? Machine B is preferable at a level of production below 5,750 units. (Enter your response as a whole number.)
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