whom currently pays $8,000 per year to attend. In dition to revenues from tuitio
ID: 3304272 • Letter: W
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whom currently pays $8,000 per year to attend. In dition to revenues from tuition, the school receives s activ- ity. The budget for the upcoming year is $15 million, Managers are quick to claim that decision modelers talk to them in a jargon that does not sound like Eng- lish. List four terms that might not be understood by a manager. Then explain in nontechnical terms what each of them means Why do you think many decision analysts don't like o participate in the implementation process? What could be done to change this attitude? Should people who will be using the results of a new modeling approach become involved in the techni- cal aspects of the problem-solving procedure? C. W. Churchman once said that "mathematics tends to lull the unsuspecting into believing that he who thinks elaborately thinks well." Do you think that the best decision models are the ones that are most elaborate and complex mathematically? Why? 2-15 an appropriation from the church to sustain it d the church appropriation will be $4.8 million By how much will the school have to raise tuition per student to keep from having a shortfall in the 2-16 2-23 Refer to Problem 2-22. Sensing resistance to the 2-17 idea of raising tuition from members of St. Joseph's Church, one of the board members suggested that the 960 children of church members could pa 8,000 as usual. Children of nonmembers would pay more. What would the nonmember tuition per year be if St. Joseph's wanted to continue to plan for a $15 million budget? 2-18 2-24 Refer to Problems 2-22 and 2-23. Another board put member believes that if church members pay $8,000 in tuition, the most St. Joseph's can increase non Problems 2-19 A Website has a fixed cost $15,000 per day. The revenue is $0.06 each time the Website is accessed. The variable cost of responding to each hit is $0.02. (a) How many times must this Website be accessed member tuition is $1,000 per year. She suggests that another solution might be to cap nonmember tuition at $9,000 and attempt to recruit more nonmember students to make up the shortfall. Under this plan, how many new nonmember students will need to be rmining ulation each day to break even? (b) What is the break-even point, in dollars? Great Lakes Automotive is considering producing. in-house, a gear assembly that it currently purchases from Delta Supply for $6 per unit. Great Lakes esti- mates that if it chooses to manufacture the gear as- sembly, it will cost $23,000 to set up the process and then $3.82 per unit for labor and materials. At what volume would these options cost Great Lakes the same amount of money? 2-20 An electronics firm is currently manufacturing 2-25 an item that has a variable cost of $0.60 per unit and selling price of $1.10 per unit. Fixed costs are $15,500. Current volume is 32,000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $8,000. Variable cost would increase to $0.70, but volume is expected to jump to 50,000 units due to the higher quality of the product. (a) Should the company buy the new equipment? (b) Compute the profit with the current equipment 2-26 A start-up publishing company estimates that the fixed costs of its first major project will be $190,000, the variable cost will be $18, and the selling price per book will be $34. and the expected profit with the new equipment.Explanation / Answer
Q. 2.19 Fixed Cost = $ 15000 per day
Revenue = $ 0.06 per each hit
Variable cost = $ 0.02 per each hit
Let say there is X times when website is accessed.
(A) Total cost = Fixed cost + Variable Cost = 15000 + 0.05 X
15000 + 0.02 X = 0.06X
15000 = 0.04 X
X = 375,000 Hits
(b) Brekeven Point in dollars = 375000 * 0.06 = $ 22500
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