The maker of Winglow is purchasing a new stamping machine. Two options are being
ID: 2816628 • Letter: T
Question
The maker of Winglow is purchasing a new stamping machine. Two options are being considered, Rooney and Blair. The sales forecast for Winglow is 8,750 units for next year. If purchased, the Rooney w plant fixed costs by $16,000 and reduce variable costs by $1.60 per unit. The Blair would increase fixed costs by $5,750 and reduce variable costs by $2.00 per unit. If variable costs are now $20 per unit machine should be purchased? Show the cost figures used to reach your decision Impact of Rooney Current Fixed Costs t $ Impact of Blair Current Fixed Costs+ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. Ihe tolerance is 13%Explanation / Answer
Blair should be purchased
Impact of Rooney=Current Fixed Costs+16000-1.6*8750=Current Fixed Costs+2000
Impact of Blair=Current Fixed Costs+5750-2*8750=Current Fixed Costs-11750
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