Exam Name___________________________________ SHORT ANSWER.

Write the word or phrase that best completes each statement or answers the question. Answer the question. 1)

A $38,000 coil winding and unwindi ng machin e is estimat ed to provide addition al value to producti on by $15 per unit. When the machin e is operate d at 58 units per hour, it needs to be cooled down after 4 hours of operatio n and receive minor mainten ance for 15 minutes . When the machin e is operate d at 118 units per hour, it needs to be cooled down after 5 hours of operatio n and receive

minor maintenance for 30 minutes. The production line runs 8 hours per day. If each maintenance check costs $625 and the machine has a useful life of 80,000 hours of operations, at what speed should the machine should be operated?

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______ _______ 2)

You are Which alternative should be selected? deciding betwee Alternative Electric n three Price of water heater $28,000 types of EF 2.0 water Fuel cost $0.1/kWh heaters. Annual maintenance costs $3000 The Market value $25,200 associat ed costs are shown below. The annual cost of operatio n for gas and oil heaters is estimat ed by 365 x 41045/E F x Fuel Cost per Btu, and the annual cost of operatio n for electric water heaters is estimat ed by 365 x 12.03/E Fx Electrici ty Cost per kWh. The selected heater will be used for only one year and then sold at the market value.

Gas Oil $23,000 $25,000 0.57 0.75 $0.00001/Btu $0.00001/Btu $2200 $2500 $20,700 $22,500

______ _______ 2) 3)

A the new machine if it wants to break even by the end of the first year? garment manufa cturing compan y makes 380,000 articles per year. Each article takes 95 minutes of direct labor at the rate of $9.00 per hour. The overhea d costs are $7.50 per direct labor hour. The average price of the finished product is $80 per article. A new machin e will reduce the direct labor hour by 15 minutes per article. What is the maximu m amount the compan y should pay for

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______ _______ 4)

A local cable compan y has a fixed cost of $7400 per month and variable costs of $50 per month per subscrib er. If the compan y charges on average $110 per month to its custom ers, find the breakev en point in terms of subscrib ers per month for the compan y.

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______ _______ 5)

A compan y estimat es its annual expense s, Y, in dollars from and annual revenue in dollars from where X is annual units sold. Find the value of X that gives maximu m profit.

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The annual fixed cost for an inspecti ng and profiling web controll er manufa cturing compan y are $44,000 , and the variable costs are $38 per unit. If the selling price per unit is what is the compan y's range of profitabl e demand ?

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______ _______ 7)

The annual fixed cost for a light fixture manufa cturing compan y are $38,000 , and the variable costs are $40 per unit. If the selling price per unit is p = 485 1.395X, what is the optimu m demand for a light fixture?

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______ _______ 8)

An accounti ng and manage ment consulti ng firm chargeout rate is $112 per hour. The maximu m output is 214,000 hours per year. The fixed cost is $ 610,000 per year and the variable cost is $ 62 per standar d service hour. What is the breakev en point in percent age of total capacity ?

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______ _______ 9)

A the new breakeven point in number of accounts? headhu nter compan y has fixed costs of $57,000 per month and variable costs of $1000 per custom er account . The compan y currentl y charges $1150 per month for each account and has 38,000 account s. It wants to raise the monthly fee to $1160.5 5 to cover enhanc ed features such as a new web interfac e and a newly acquire d databas e, which increase s the variable cost by 9 percent. What is

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______ _______ 1 0)

The cost $10 per hour. What is the optimum velocity needed to minimize the total for costs? operatin ga commer cial truck is kn , where k is a constan t of proporti onally, v is velocity in miles per hours, and n is the trip length in miles. It is estimat ed that at 85 mph, the average cost of operatio n is $52 per mile. The truck owner wants to minimiz e the cost of operatio n, which needs to balance against the cost of delays and unsched uled mainten ance, which is assume d to be

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A manufa cturing compan y leases a machin e for $31,000 per year. Each unit produce d costs $36 in labor and $65 in material s. To break even, 21,000 units must be sold. What is the price of the product ?

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______ _______ 1 2)

A 4300 units produced, while Model B requires 5 hours of maintenance for every manufa 3300 units. The maintenance cost for both models is $100 per hour. The cturing variable operating cost is $340 per hour for Model A and $290 per hour for plant is Model B. Due to obsolete parts, there is a sunk cost of $2700 for model A and plannin $1900 for Model B . If the price of the product is $150 per unit and the g to company expects to sell 145,000 units each year, which model should be replace selected? outdate d equipm ent with more energyefficient and environ mentalfriendly equipm ent. Two models are under consider ation. Model A is sold for $159,00 0 and can produce at an optimu m speed of 78 unit/hou r. Model B is sold for the same price, but can produce at an optimu m speed of 76 unit/hou r. Model A requires 6 hours of mainten ance for every

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A Assume negligible salvage value. manufa cturer Alternative A of hard Investment cost, $ 40,000 board Fixed cost, $/year 4700 and Variable cost, fiber $/hour 240 cement sidings and panels purchas ed new equipm ent for its new product line. Three alternati ves are under consider ation. The costs associat ed with each alternati ve are given below. Which alternati ve is most economi cal to minimiz e total life cycle costs, if the life of the equipm ent is estimat ed to be 7 years and the compan y operate s on average 3800 hours per year?

B 39,000 4500 235

C 41,000 4800 243

______ _______ 13) 1 4)

A night 150% of direct labor cost per item. If the company requires, on average, 575 vision items each year, should the item be purchased or manufactured? goggle manufa cturer is evaluati ng a makeversuspurchas e situatio n for a compon ent used in its lowpriced product s. The compon ent can be purchas ed at a variable wholesa le price of , where X is the number of items. Alternat ively, the compon ent can be produce d with a direct material cost of $17 per item and direct labor cost of $38 per item. The manufa cturing overhea d is allocate d at

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An uninterr uptible power system manufa cturer is currentl y deciding betwee n two process es for its new automat ed assembl y system. All defectfree units can be sold at $210 each, and all rejected units can be sold at $11 for scrap. Other related informat ion for each model is given below. Output rate, units/hour Daily available production time, hours Material cost, $/unit Variable operating cost, $/hour Variable overhead cost, $/hour Percent reject

Which ______ _______ process should be adopted to maximiz e profit per day? 15)

1 )

At 58 uni ts per ho 2)

ur, net increase in value per day = $5363.83 At 118 units per hour, net increase in value per day = $11,922.81 Select the machine speed that provides the higher net increase in value per daymachine speed B.

T 3 er o ) th T at o T pr o ovi S de e s th e lea st an nu al co sts t he ga s he at er.

$1,5 67,500.00 4)

123. 33 subscribers per month 5)

200 units 6)

The range of profitable demand is 112 to 689 units per year. 7)

159. 50 units per year 8)

5.70 % of capacity 9)

807. 94 accounts 10)

The k should be operated at an average velocity of 2.33 mph to minimize the total cost of operation and truc delays. 11)

$10 2.48 12)

Mod 2,284 per 145,000 units el A: Model B: $575,259 per 145,000 units $65 Select the design that minimizes the total cost for 145,000 units/yearModel B. 13)

A: Tota l life cycl e 14)

costs = $6,456,900.00 B: Total life cycle costs = $6,321,500.00 C: Total life cycle costs = $6,538,400.00 To minimize life cycle costs, select Alternative B.

Purchase: $29, Manufacture: $64,400.00 950. 00 Select the option that has the least total costpurchasing the item. 15)

er day = $36 7,71 0.00

er day = $40 1,11 0.40 max imiz es profi t per day Pro cess B.

ss that