1. John from One Source Credit is trying to decide how many machines to buy. Each machine can process 300 customers per day. One machine will have total fixed costs of $3,100 per day, two machines will have total fixed costs of $5,900 per day. Variable costs are $40 per customer, revenue will be $75 per customer.
i. Determine the break-even point for one machine.
a. 89 Customers per Day
b. 98 Customers per Day
c. 78 Customers per Day
ii. Determine the break-even point for two machines.
a. 916 Customers per Day
b. 89 Customers per Day
c. 169 Customers per day
iii. If estimated demand is between 125-150 customers per day, how many machines should John buy?
a. One Machine
b. Two Machines
c. No Machines
2. Lucy is trying to calculate Efficiency on her cookie line. She knows that her Design Capacity is 140,000 cookies per day, her Utilization Rate is 71% and her Effective Capacity is 113,000 cookies per day.
iv. What is the Efficiency of her cookie line?
a. 78%
b. 88%
c. 71%
v. If she wants to increase her effective capacity, she should:
a. Have her employees take longer coffee breaks.
b. Look for a larger building
c. Lobby for increased government regulation