A part can be made either milling, or by broaching: The tooling for the milling machine will cost P15 to make, the set-up time will cost P20 and the operating cost for each part will be P0.50. The tools for broaching will cost P475, the set-up will cost P5 and the operating cost per part will then be P0.10. What production volume of

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 9E
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A part can be made either milling. or by
broaching: The tooling for the milling
machine will cost P15 to make, the set-up
time will cost P20 and the operating cost
for each part will be P0.50. The tools for
broaching will cost P475, the set-up will
cost P5 and the operating cost per part will
then be P0.10. What production volume of
the part is necessary to justify using the
broaching machine?
Transcribed Image Text:A part can be made either milling. or by broaching: The tooling for the milling machine will cost P15 to make, the set-up time will cost P20 and the operating cost for each part will be P0.50. The tools for broaching will cost P475, the set-up will cost P5 and the operating cost per part will then be P0.10. What production volume of the part is necessary to justify using the broaching machine?
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