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A component can be produced by any of the four processes, I, II, III and IV. Process I has fixed cost of Rs. 20 and variable cost of Rs. 3 per piece.Process II has a fixed cost of Rs. 50 and variable cost of Rs. 1 per piece. Process III has a fixed cost of Rs. 40.00 and variable cost of Rs. 2 per piece. Process IV has fixed cost of Rs. 10 and Variable cost Rs. 4 per piece. If company wishes to produce 100 pieces of the component, from economic point of view it should choose
[2005 : 2 Marks]
  • a)
    Process I
  • b)
    Process II
  • c)
    Process III
  • d)
    Process IV
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
A component can be produced by any of the four processes, I, II, III a...
 

Total cost = Fixed Cost (FC) + Number of piece (n) × Variable Cost per piece (VC) TC = FC + (n) x V.C
For I
TCI = 20+ (100) 3 = 320
For II
TCII = 50 + (100) 1 = 150
For III
TCIII = 40 + 100 (2) = 240
ForIV
TCIV = 10 + 100 (4) = 410
So from economical point of view, one should chose process II
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Most Upvoted Answer
A component can be produced by any of the four processes, I, II, III a...
 

Total cost = Fixed Cost (FC) + Number of piece (n) × Variable Cost per piece (VC) TC = FC + (n) x V.C
For I
TCI = 20+ (100) 3 = 320
For II
TCII = 50 + (100) 1 = 150
For III
TCIII = 40 + 100 (2) = 240
ForIV
TCIV = 10 + 100 (4) = 410
So from economical point of view, one should chose process II
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A component can be produced by any of the four processes, I, II, III and IV. Process I has fixed cost of Rs. 20 and variable cost of Rs. 3 per piece.Process II has a fixed cost of Rs. 50 and variable cost of Rs. 1 per piece. Process III has a fixed cost of Rs. 40.00 and variable cost of Rs. 2 per piece. Process IV has fixed cost of Rs. 10 and Variable cost Rs. 4 per piece. If company wishes to produce 100 pieces of the component, from economic point of view it should choose[2005 : 2 Marks]a)Process Ib)Process IIc)Process IIId)Process IVCorrect answer is option 'B'. Can you explain this answer?
Question Description
A component can be produced by any of the four processes, I, II, III and IV. Process I has fixed cost of Rs. 20 and variable cost of Rs. 3 per piece.Process II has a fixed cost of Rs. 50 and variable cost of Rs. 1 per piece. Process III has a fixed cost of Rs. 40.00 and variable cost of Rs. 2 per piece. Process IV has fixed cost of Rs. 10 and Variable cost Rs. 4 per piece. If company wishes to produce 100 pieces of the component, from economic point of view it should choose[2005 : 2 Marks]a)Process Ib)Process IIc)Process IIId)Process IVCorrect answer is option 'B'. Can you explain this answer? for Mechanical Engineering 2024 is part of Mechanical Engineering preparation. The Question and answers have been prepared according to the Mechanical Engineering exam syllabus. Information about A component can be produced by any of the four processes, I, II, III and IV. Process I has fixed cost of Rs. 20 and variable cost of Rs. 3 per piece.Process II has a fixed cost of Rs. 50 and variable cost of Rs. 1 per piece. Process III has a fixed cost of Rs. 40.00 and variable cost of Rs. 2 per piece. Process IV has fixed cost of Rs. 10 and Variable cost Rs. 4 per piece. If company wishes to produce 100 pieces of the component, from economic point of view it should choose[2005 : 2 Marks]a)Process Ib)Process IIc)Process IIId)Process IVCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Mechanical Engineering 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A component can be produced by any of the four processes, I, II, III and IV. Process I has fixed cost of Rs. 20 and variable cost of Rs. 3 per piece.Process II has a fixed cost of Rs. 50 and variable cost of Rs. 1 per piece. Process III has a fixed cost of Rs. 40.00 and variable cost of Rs. 2 per piece. Process IV has fixed cost of Rs. 10 and Variable cost Rs. 4 per piece. If company wishes to produce 100 pieces of the component, from economic point of view it should choose[2005 : 2 Marks]a)Process Ib)Process IIc)Process IIId)Process IVCorrect answer is option 'B'. Can you explain this answer?.
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