A Firm Must Make a Choice Between a Manual and a Semi-Automatic

question 12

Essay

A firm must make a choice between a manual and a semi-automatic production process for a new product line. Following are the costs for each process:
$\begin{array}{|l|c|c|}\hline \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { Manual } & \$ 200,000 & \$ 85.00 \\\hline \text { Semi-Automatic } & \$ 500,000 & \$ 55.00 \\\hline\end{array}$
a.Above what breakeven production quantity would the semi-automatic alternative be preferred?
b.Which process is more economical for an annual production volume of 5,000 units?
c.Which process is more economical for an annual production volume of 9,000 units?

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Definitions:

Outermost Whorl

The outermost circle or arrangement of parts in a flower, typically consisting of sepals.

Ovule

The structure in seed plants that develops into a seed after fertilization, containing a female gametophyte and the egg cell.

Tube Cell

refers to a part of the pollen grain in flowering plants, functioning as a pathway for sperm cells to reach the ovule.

Ovule

The structure in seed plants that develops into a seed after fertilization.