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##### Owen Conner works part-time packaging software for a local distribution

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**Question**

Problem 7-13;Owen Conner works part-time packaging software for a local distribution;company in Indiana. The annual fixed cost is $10,000 for this process, direct;labor is $4.00 per package, and material is $4.75 per package. The selling;price will be $12.50 per package.;a. What is the break-even point in units? (Do not round intermediate;calculations. Roundup your answer to the next whole number.);Break-even;point;units;b. How much revenue do we need to take in before breaking even? (Round;your answer to the nearest dollar amount.);Break-even;point;$;AudioCables, Inc., is currently manufacturing an adapter that has a variable;cost of $0.60 per unit and a selling price of $1.20 per unit. Fixed costs are;$14,000. Current sales volume is 40,000 units. The firm can substantially;improve the product quality by adding a new piece of equipment at an;additional fixed cost of $6,000. Variable costs would increase to $0.75, but;sales volume should jump to 75,000 units due to a higher-quality product.;a. What is the current profit and proposed profit of the sales of AudioCables?;(Negative amounts should be indicated by a minus sign.);Current profit;Proposed profit;$;$;b.Should AudioCables buy the new equipment?;No;Yes;There is insufficient information provided to answer this question;Problem 7-16;The diagram below represents a process where two components are m;stations A1 and A2 (one component is made at A1 and the other at A2;These components are then assembled at station B and moved throug;rest of the process, where some additional work is completed at statio;D, and E.;Assume that one and only one person is allowed at each station. A;that the times given below for each station represent the amount of w;needs to be done at that station by that person, with no processing tim;variation. Assume that inventory is not allowed to build in the system;What is the average hourly output of the process when it is in normal;operation? (Round your answer to the nearest whole number.);Average hourly;output;units

Paper#18644 | Written in 18-Jul-2015

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