Sam asked in Education & ReferenceHomework Help · 11 months ago

Please Help me With Business Finance?

M1_A2.

Winston Manufacturing is trying to decide whether to refurbish old equipment, upgrade the old equipment or purchase new equipment. The cost to refurbish is $55,000, to upgrade is $95,000, or to purchase new equipment is $175,000.The product sells for $14.50 but the variable costs are dependent on the type on changes that have been made. Using refurbished equipment results in variable cost per unit of $6.85, upgraded equipment results in variable cost per unit of $5.15, and using new equipment results in variable cost per unit of $4.25. The expected sales of the product is estimated to be between 30,000 and 40,000 units.

a) How many units need to be sold to break-even if the equipment is refurbished?

b) How many units need to be sold to break-even if the equipment is upgraded?

c) How many units need to be sold to break-even if the equipment is purchased new?

d) What is the profit/loss using refurbished equipment if 40,000 units are sold?

e) What is the profit/loss using upgraded equipment if 35,000 units are sold?

f) What is the profit/loss using new equipment if 30,000 units are sold?

g) Which option would you recommend to the manufacturer (you are not using parts d, e, and f for this answer – if the volume was between 30,000 and 40,000 (same volume for all processes) – which option would produce the greatest amount of profit)?

1 Answer

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  • Anonymous
    11 months ago

    Do your own goddamn homework, punk.

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