Cost-volume-profit analysis can also be used in making personal financial decisions. For example, the purchase of a new car is o

ne of your biggest personal expenditures. It is important that you carefully analyze your options. Suppose that you are considering the purchase of a hybrid vehicle. Letâ€™s assume the following facts. The hybrid will initially cost an additional $6,000 above the cost of a traditional vehicle. The hybrid will get 30 miles per gallon of gas, and the traditional car will get 20 miles per gallon. Also, assume that the cost of gas is $2.40 per gallon. Using the facts above, answer the following questions.
a. What is the variable gasoline cost of going one mile in the hybrid car? What is the variable cost of going one mile in the traditional car?
b. Using the information in part (a), if "miles" is your unit of measure, what is the "contribution margin" of the hybrid vehicle relative to the traditional vehicle? That is, express the variable cost savings on a per-mile basis.
c. How many miles would you have to drive in order to break even on your investment in the hybrid car?
d. What other factors might you want to consider?

Business

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Northwoods Backpackers is a retail catalog store in Vermont that specializes in outdoor clothing and camping equipment. Phone or

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Answer:

The lowest cost ( Z ) will equal $636 daily

quantity of permanent operators = 6

quantity of temporary operators = 3

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based on the provided information: the organization has a total of ten (10) workstations and employs both permanent and temporary operators; the following demonstrates the work that can be performed with these resources

Orders processed each day

permanent operator; 76

temporary operator; 53

company average: minimum of 600

Errors recorded daily

permanent operator; 1.3

temporary operator; 4.1

acceptable maximum error rate: 24

daily wages; permanent ($81), temporary ($50)

formulate an integer programming model to ascertain the number of permanent and temporary operators needed to minimize costs

Let X1 represent the permanent operators and X2 represent the temporary operators

the daily operator cost can be expressed as ( Z ) = 81 X1 + 50 X2 (first constraint)

operators at workstations = X1 + X2 ≤ 10 (second constraint)

Total orders handled = 76 X1 + 53 X2 ≥ 600 (third)

allowable errors permit = 1.3 X1 + 4.1 X2 ≤ 24 (fourth constraint)

Operators must be whole numbers = X1, X2 ≥ 0 (fifth constraint)

construct an Excel linear program incorporating both the data provided and the constraints formulated.

The lowest cost ( Z ) will equal $636 daily

quantity of permanent operators = 6

quantity of temporary operators = 3

included is a screenshot of the completed Excel linear program

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