A Fabrication Company Wants to Increase Capacity by Adding a New

question 89

Multiple Choice

A fabrication company wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $21 per unit. If the estimated output is 5000 units, which machine should be purchased?

• A) machine A
• B) machine B
• C) either machine A or machine B
• D) no purchase because neither machine yields a profit at that volume
• E) purchase both machines since they are both profitable

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Definitions:

Deep Unconsciousness

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Physician-assisted suicide is a practice where a physician provides a patient, who meets certain criteria, with the means to end their own life.

Oregon Residents

Individuals who live in or have established residency in the state of Oregon, USA.

European Americans

Individuals in the United States who trace their ancestry to Europe.