Process X is estimated to have a fixed cost of $40,000 per year and a variable cost of $60 per unit in year 1, decreasing by $5 per unit per year thereafter. Process Y will have a fixed cost of $70,000 per year and a variable cost of $10 per unit in year 1, increasing by $1 per unit per year thereafter. At an interest rate of 12% per year, how many units must be produced in year 3 for the two processes to break even?
What will be an ideal response?
Let R3 = production rate in year 3
-40,000 – 50R3 = -70,000 – 12R3
38R3 = 30,000
R3 = 789.5 (790 units)
You might also like to view...
What does understanding the consumption of power from a consumer perspective do for a process technician in the power generation industry?
A) They get bonuses B) Their work is enhanced C) It has no impact D) It allows them to avoid additional training
Growing plants hydroponically does not require the use of pesticides
Indicate whether the statement is true or false
PROBLEM 3.61 The mass moment of inertia of a gear is to be determined experimentally by using a torsional pendulum consisting of a 6-ft steel wire. Knowing that G ? 11.2 ? 106 psi, determine the diameter of the wire for which the torsional spring constant will be 4.27 lb ? ft/rad.
How many gallons will a cylindrical gas can that is 15.0 inches in diameter and 7.5 inches tall hold? Round your answer to the nearest tenth of a gallon
What will be an ideal response?