Safari File Edit View History Bookmarks Window Help eCourses Spring2018 MGMT5433

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Safari File Edit View History Bookmarks Window Help eCourses Spring2018 MGMT5433Z01-1820-24317 Question 7 A company wants to buy a new machines. Two machines have beon identified that grovide the same level of produet quaity Machine A is expected to incur a foxed cost of $124984 per year and add a variable cost of $80 per unit Machine B is expected to incur a fxed cost of $186851 per year and add a variable cost of S63 per unt The company must select machine A or machine B. What is the quantity for which the total costs for the two machines are equa? Not ye answered Points out of 25.00 Flag question The quantity is units per year. NOTE: Use at least 4 decimals. Provious page A.

Explanation / Answer

Solution :

Total Cost for Machine A for qty Q = FC + VC = 124984 + 80*Q

Total Cost for Machine B for qty Q = FC + VC = 186851 + 63*Q

Since, total costs for both machine are to be same.

124984 + 80*Q = 186851 + 63*Q

Q = 3639.235

(The variable cost for Machine B is not clear. I have considered it as 63.

If it is 53, answer will be 2291.37)

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