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Question 153910: An Electronics Firm manufactures calculators at the McGregor plant and the Ennis Plant. At McGregor, the unit cost is $8.40, and the fixed cost is $7480. At Ennis, the unit cost is $7.880, and the fixed cost is $5419. The company wants the two plants to produce a combined total of 1500 calculators, and the total costs at each plant must be the same. How many should be produced at each plant?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! An Electronics Firm manufactures calculators at the McGregor plant and the Ennis Plant.
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The company wants the two plants to produce a combined total of 1500 calculators, and the total costs at each plant must be the same. How many should be produced at each plant?
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Let number produced by McGregor be "x".
Letnumber produced by Ennis be "1500-x".
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At McGregor, the unit cost is $8.40, and the fixed cost is $7480.
Total McGregor cost(x) = 7480 + 8.4x
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At Ennis, the unit cost is $7.880, and the fixed cost is $5419.
Total Ennis cost(x) = 5419 + 7.88(1500-x)
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EQUATION:
7480 + 8.4x = 5419 + 7.88(1500-x)
7480 + 8.4x = 5419 + 11820 - 7.88x
16.28x = 9759
x is approximately 600 (# of McGregor units if costs are going to be equal)
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That implies that Ennis would have to produce 900 units.
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How you make the number of units equal AND the costs equal is beyond me.
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Cheers,
Stan H.
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