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Author Question: Mary is considering purchasing a machine from two suppliers. Supplier A's machine has an annual ... (Read 165 times)

vicky

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Question 1

Karla's candle factory is considering two different machines. Machine A is highly automated with FC of $25,000 and VC of $.1/candle. Machine B is actually no machine but rather hand labor with FC of $10,000 and VC of $.5/candle. If demand for Karla's candles is 25,000, which machine should she pick?

Question 2

Mary is considering purchasing a machine from two suppliers. Supplier A's machine has an annual fixed cost of $10,000 and a unit variable cost of $2.10. Supplier B's machine has an annual fixed cost of $16,000 and a unit variable cost of $3.00. How large should Mary's annual demand be in order to make Supplier B's machine the better choice?


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Marked as best answer by vicky on Dec 3, 2019

babybsemail

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vicky

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Reply 2 on: Dec 3, 2019
YES! Correct, THANKS for helping me on my review


ricroger

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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