Question

On Tuesday, you have two orders. You may send each order to a separate factory OR both to the same factory. If they are both sent to be fulfilled by a single factory, you must use the total of the two orders to find that factory's cost per unit for production on this day. Remember that the goal is to end the day with the lowest cost per unit to produce the company's products. Order B is 7,000 units, and Order C is 30,000 units

Answer 1

• Answer:

The cost per unit for production on this day is $1.5 whether you send each order to a separate factory or send both orders to the same factory.

• Explanation:

• Formula:

(cost per unit B) (Number of units) + (cost per unit C) (Number of units) / (Total Number of Units)

• Make a plan:

In this question, we need to calculate the cost per unit for the production on this day if you send each order to a separate factory and if you send both orders to the same factory.

• Finally, we compare the two costs and choose the lower one.

• Solve the problem:

If you send each order to a separate factory, the cost per unit for production on this day is

• For Order (B): 10,500 / 7,000 = 1.5

• For Order (C): 45,000 / 30,000 = 1.5

• Now, the total cost is:

7,000 * 1.5 + 30,000 * 1.5 = 52,500

If you send both orders to the same factory, the cost per unit for production on this day is:

• The total Cost is: 10,500 + 45,000 = 55,000

• The total Unit is: 7,000 + 30,000 = 37,000

• However, The cost per unit is: 55,500 / 37,000 = 1.5

• Draw the conclusion:
  The cost per unit for production on this day is $1.5 whether you send each order to a separate factory or send both orders to the same factory.

I hope this helps you!

Answer 2

To determine the most cost-effective option, let's consider both scenarios:

Scenario 1: Sending each order to a separate factory

Order B (7,000 units) will be sent to Factory X.

Order C (30,000 units) will be sent to Factory Y.

In this scenario, we would have two separate production costs: one for Factory X and another for Factory Y. To calculate the cost per unit for each factory, we would need the cost of production for each order at their respective factories. Without that information, we cannot determine which factory would offer the lowest cost per unit.

Scenario 2: Sending both orders to the same factory

In this scenario, both Order B and Order C would be sent to a single factory, which we'll refer to as Factory Z. The total number of units for both orders is 7,000 + 30,000 = 37,000 units.

To find the cost per unit for Factory Z, we would need the total cost of production for both orders at Factory Z. Dividing this total cost by the number of units (37,000) would give us the cost per unit.

Unfortunately, without the specific cost of production at each factory or any other relevant information, we cannot determine which option would result in the lowest cost per unit for production on that day.

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