SOLUTION: A manufacturer od automobile water pumps is considering retooling for one or two manufacturing processes, with monthly fixed costs and unit costs as indicated in the table. Each wa
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Question 993543: A manufacturer od automobile water pumps is considering retooling for one or two manufacturing processes, with monthly fixed costs and unit costs as indicated in the table. Each water pump can be sold for $50.
Process A:
Fixed Costs: $12,390
Unit Cost: $29
Process B:
Fixed Costs: $20,460
Unit Cost: $17
A. How many water pumps should be sold per month for the manufacturer to break even if process A is used to produce the pumps?
B. How many water pumps should be sold per month for the manufacturer to break even if process B is used to produce the pumps?
(Hint: To break even, revenue=costs)
C. If expected sales are $50 water pumps per month, which process should be used?
Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
The cost function is the fixed costs plus the per unit cost multiplied by the number of units. The revenue function is the sale price per unit times the number of units.
John
My calculator said it, I believe it, that settles it
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