Engineering Economy

Question 1 (10 points): A furniture company has a contract to sell products overseas. The fixed cost that can be allocated to the production of the product is $800,000 per month. The variable cost per thousand board feet is $155.50. The price charged will be determined by p = $600 − (0.5) D per 1,000 board feet. a. For this situation, determine the optimal monthly sales volume for this product and calculate the profit (or loss) at the optimal volume. b. What is the domain of profitable demand during a month? Question 2 (15 points): An assembley company is analyzing a situation which has to make or purchase for a component used in several products, and the engineering department has developed these data: Option A: Purchase 20,000 items per year at a fixed price of $8.50 per item. The cost of placing the order is negligible according to the present cost accounting procedure. Option B: Manufacture 20,000 items per year, using available capacity in the factory. Cost estimates are direct materials = $5.00 per item and direct labor = $1.50 per item. Manufacturing overhead is allocated at 200% of direct labor (= $3.00 per item). Based on these data, should the item be purchased or manufactured? Tài liệu giúp bạn tham khảo, ôn tập và đạt kết quả cao. Mời bạn đón xem.