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Copyright ©2015, Elsevier, Inc
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5-22) You are a manufacturing engineer and discover that you can purchase a machine that will
replace a labor-intensive manual operation in your manufacturing line. The machine costs $1.5
million, but the labor savings costs are $7.80 per unit manufactured. Can you get a BEP less
than 18 months if you make 8500 units per day?
Need: BEP = ______ months for a $1.5 million machine making 8,500
units per day.
Kosky, Wise, Balmer, Keat: Exploring Engineering, Fourth Edition
5-23) An automobile manufacturer would like to add a new feature to their standard production
model. The new feature will cost the manufacturer $8.67 per car to produce, and they expect to
sell 100,000 cars per year. If the cars normally sell for $25,990 each, how much do they need to
increase the price to reach a break even point in 18 months?
Need: Minimum price increase for a BEP of 18 months for a feature
costing $8.67 per unit on 100,000 cars/yr each currently selling for
$25,990
Kosky, Wise, Balmer, Keat: Exploring Engineering, Fourth Edition
It is clear you must tell someone who is senior to you. Escalate to more senior
management if you are ignored.
Kosky, Wise, Balmer, Keat: Exploring Engineering, Fourth Edition
jail. b) is your least bad course of action. It would be best to waffle to the question and
not answer it except in generalities
