Question 1
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Question text
All of the below are examples of problems applicable to
Engineering Economy solution techniques, EXCEPT:
Select one:
a.
Choosing the capacity of a new production facility.
b.
Deciding whether to purchase a machine lubricant in order to
extend the life of a currently used machine.
c.
Being sued by a customer for damages resulting from a defective
design of the product sold.
d.
Deciding whether a company truck should be purchased or leased.
Feedback
Your answer is correct.
Engineering Economy is concerned with how to choose among
available alternatives. All of the answer choices describing choosing
alternatives are correct.
The correct answer is: Being sued by a customer for damages
resulting from a defective design of the product sold.
Question 2
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Question text
Engineering Economy, and this course, involves all of the below,
EXCEPT:
Select one:
a.
comparing and choosing between alternatives
b.
preparing financial statements for engineering business units
c.
discounting dollars received in the future into today's value
d.
comparing benefits versus costs
Feedback
Your answer is correct.
Engineering Economy is concerned with selecting among available
alternatives, using sound financial decision making techniques, involving
comparing benefits versus costs, expressed in dollars, where dollars
representing future benefits and costs are properly discounted.
The correct answer is: preparing financial statements for
engineering business units
Question 3
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Question text
Which of the below would typically decrease with a larger number
of units produced?
Select one:
a.
Variable Cost per Unit
b.
Fixed Cost per Unit
c.
Total Variable Cost
d.
Total Fixed Cost
Feedback
Your answer is correct.
Total Fixed Cost is unchanged when more or less is produced.
Fixed cost per unit declines with increasing production because the total fixed
cost is divided by a larger number of units when more are produced. Total
variable cost increases with increasing production. Variable cost per unit is
typically assumed to remain unchanged with more or less produced.
The correct answer is: Fixed Cost per Unit
Question 4
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Question text
Which of the below would typically increase with a larger number
of units produced?
Select one:
a.
Total Variable Cost
b.
Fixed Cost per Unit
c.
Total Fixed Cost
d.
Variable Cost per Unit
Feedback
Your answer is correct.
Total Fixed Cost is unchanged when more or less is produced.
Fixed cost per unit declines with increasing production because the total fixed
cost is divided by a larger number of units when more are produced. Total
variable cost increases with increasing production. Variable cost per unit is
typically assumed to remain unchanged with more or less produced.
The correct answer is: Total Variable Cost
Question 5
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Question text
Assume fixed cost equals $80,000, the selling price is $100, and
the variable cost per unit is $60. What is the contribution to profit per unit?
Select one:
a.
$2,000
b.
$40
c.
$160
d.
$500
Feedback
Your answer is correct.
The contribution margin is simply the increase in profit from
each unit, which is equal to the selling price (revenue from selling one more
unit) minus the variable cost per unit (cost of producing one more unit), which
is equal to 100 - 60 = $40.
The correct answer is: $40
Question 6
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Question text
All of the below are correct statements regarding the process of
finding the optimal quantity to be produced, EXCEPT:
Select one:
a.
Finding the optimal quantity involves taking a second derivative
and setting it equal to zero.
b.
Finding the optimal quantity involves taking the first
derivative and setting it equal to zero.
c.
Finding the optimal quantity involves writing down an expression
for calculating profit.
d.
Finding the optimal quantity involves finding the optimal point
on the demand curve.
Feedback
Your answer is correct.
The second derivative can be taken to verify that we found a
maximum (if the second derivative is negative), as opposed to a minimum (if the
second derivative is positive). It doesn't make sense to set the second derivative
equal to zero.
The correct answer is: Finding the optimal quantity involves
taking a second derivative and setting it equal to zero.
Question 7
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Question text
Tri-State Gaming Enterprises is considering developing a new
video game for gamers 12-14 years old, which is an age group that is currently
missing among its customers. Before making a decision whether to enter this new
market or not, the company conducts market research in order to better estimate
potential demand from the new age group. This market research results in a net
cash outflow of $15,000. The net cash outflow associated with this market
research is an example of
Select one:
a.
A forced decision since not entering the new market would result
in a loss of $15,000.
b.
Cost that can be recovered and thus not representing an
incremental cost.
c.
Non-cash expense.
d.
Sunk cost.
Feedback
Your answer is correct.
There is no indication that the cash spent on the market
research can be recovered, resulting in a $15,000 cash outflow regardless of
whether the company decides to enter the new market or not, and thus is
considered sunk cost and should not be included in the incremental cost when
deciding whether to enter the new market or not.
The correct answer is: Sunk cost.
Question 8
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Question text
All of the relationships below are correct, EXCEPT:
Select one:
a.
Total Fixed Cost = Total Cost per Unit x Number of
Units Produced
b.
Variable Cost per Unit = Total Variable Cost / Number of Units
Produced
c.
Variable Cost per Unit = Total Cost per Unit - Fixed Cost per
Unit
d.
Total Cost = Total Fixed Cost + Total Variable Cost
Feedback
Your answer is correct.
Total Fixed Cost = Fixed Cost per Unit X Number of
Units Produced is the correct expression for Total Fixed Cost.
The correct answer is: Total Fixed Cost = Total Cost per
Unit x Number of Units Produced
Question 9
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Question text
A company incurs total cost of $225,000 when producing 10 units,
$230,000 when producing 11 units, and $235,000 when producing 12 units of
output. What is its total fixed cost?
Select one:
a.
$175,000
b.
$220,000
c.
$225,000
d.
$230,000
e.
$235,000
f.
$200,000
Feedback
Your answer is correct.
We typically assume variable cost per unit to be constant, and
we can also see from the question that it is $5,000 per unit for units 11 and
12. Therefore, assuming a constant $5,000 variable cost per unit, we can
calculate total variable cost to be $50,000 when 10 units are produced, which
leaves $225,000 - $50,000 = $175,000 total fixed cost.
The correct answer is: $175,000
Question 10
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A company incurs total cost of $225,000 when producing 10 units,
$230,000 when producing 11 units, and $235,000 when producing 12 units of
output. What is the incremental cost of producing the 12th unit of output?
Select one:
a.
$230,000
b.
$235,000
c.
$5,000
d.
$465,000
Feedback
Your answer is correct.
Incremental cost is the additional cost from producing another
unit, or more generally from choosing one alternative over another. In the
context of this question, the additional cost of producing the 12th unit is the
increase in total cost when producing 12 units instead of 11, which is 235,000
- 230,000 = $5,000. Note that the incremental cost of producing the 12th unit
is equivalent to the variable cost of producing the 12th unit, because total
fixed cost remains unchanged.
The correct answer is: $5,000
Question 11
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Question text
(NOTE: ENTER YOUR ANSWER WITHOUT THE $ AND COMMA, ROUNDED TO
ZERO DECIMAL PLACES, for instance as 29536, not as $29,535.623) Tulisker
Railroads needs to make a decision whether to purchase a premium service
package for one of its trucks. The package is expected to reduce the truck's
operating costs by $77 per hour of use. Assuming the truck is used 6
hours per day, calculate the expected annual savings resulting from
implementing the premium service package. Assume there are 360 working days in
a year. DO NOT ROUND IN YOUR CALCULATION STEPS (USE CALCULATOR MEMORY
FUNCTIONS)!
Answer:
Feedback
Multiply the hourly cost reduction by the number of hours used
per day, and then multiply by the number of working days in a year.
=77*6*360
The correct answer is: $ 166320
Question 12
Correct
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Question text
(NOTE: ENTER YOUR ANSWER WITHOUT THE $ AND COMMA, ROUNDED TO
ZERO DECIMAL PLACES, for instance as 5359, not as $5,358.623) Perelandra
Delivery Inc. operates a fleet of delivery trucks. Two different models of
trucks are available for purchase. Model A requires an oil change every 2500
miles, while Model B requires an oil change every 20000 miles driven. Each oil
change, including the associated maintenance, material, and labor, costs $402.
Assuming each truck will be operated for 440000 miles before replaced, what is
the overall savings per truck resulting from less frequent oil changes if Model
B is used instead of Model A? DO NOT ROUND IN YOUR CALCULATION STEPS (USE
CALCULATOR MEMORY FUNCTIONS)!
Answer:
Feedback
Need to first calculate the number of oil changes required by
each model, and then multiply the difference in the number of oil changes by
the cost of an oil change.
=((20000*22)/(2500*1) - (20000*22)/(10000*2)) * 402
The correct answer is: $ 61908
Question 13
Correct
3.75 points out of 3.75
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Question text
(NOTE: ENTER YOUR ANSWER WITHOUT THE COMMA, ROUNDED TO ZERO
DECIMAL PLACES, for instance as 5358, not as 5,358.623. Your answer will be
accepted regardless of whether you round your final answer up or down, but to
avoid a rounding error in your final answer do not round your intermediate
calculations too much.) Trine Metal is considering expanding its current
production facility to enable production of a new wire type. The expected
annual fixed cost associated with the expansion is $833000. The production of 1
roll of the new wire type will require 3 hours of labor at the rate of $18 per
hour, and $104 worth of material. If the selling price of 1 roll of the new
wire type is $3140, what is the minimum number of rolls of the wire that the
company needs to sell each year in order to make the expansion profitable?
Answer:
Feedback
Need to find the break-even quantity where profit is equal to
zero. This is done by dividing the fixed cost by the contribution to the profit
per unit sold. The contribution is calculated by subtracting the variable cost
per unit from the selling price. The variable cost per unit is equal to the
hours of labor per unit multiplied by the wage per hour, plus the cost of
material per unit.
The correct answer is: 279
Question 14
Correct
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Question text
(NOTE: ENTER YOUR ANSWER WITHOUT THE COMMA, ROUNDED TO ZERO
DECIMAL PLACES, for instance as 5358, not as 5,358.623.) Trine Manufacturing
Holdings has estimated the following relationships between its revenues,
expenses, and the number of units sold: Revenues = 772X - 0.7, and Expenses = 28X + 3.4 + 21. the number of units sold is denoted as X in the
above equations. Calculate the number of units sold that results in maximum
profit.
Answer:
Feedback
Need to write down an equation for Revenues minus Expenses and
maximize it with respect to X. This is done by taking a derivative with respect
to X, setting equal to 0, and then solving for X.
The correct answer is: 91
Question 1
Correct
1.00 points out of 1.00
Flag question
Question
text
All of the below are examples of problems applicable to
Engineering Economy solution techniques, EXCEPT:
Select one:
a. Choosing the capacity of a new production
facility.
b. Deciding whether to purchase a machine
lubricant in order to extend the life of a currently used machine.
c. Being sued by a customer for damages
resulting from a defective design of the product sold.
d. Deciding whether a company truck should be
purchased or leased.
Feedback
Your answer is correct.
Engineering Economy is concerned with how to choose among
available alternatives. All of the answer choices describing choosing
alternatives are correct.
The correct answer is: Being sued by a customer for damages
resulting from a defective design of the product sold.
Question 2
Incorrect
0.00 points out of 1.00
Flag question
Question
text
Engineering Economy, and this course, involves all of the below,
EXCEPT:
Select one:
a. comparing and choosing between alternatives
b. comparing benefits versus costs
c. discounting dollars received in the future
into today's value
d. preparing financial statements for
engineering business units
Feedback
Your answer is incorrect.
Engineering Economy is concerned with selecting among available
alternatives, using sound financial decision making techniques, involving
comparing benefits versus costs, expressed in dollars, where dollars
representing future benefits and costs are properly discounted.
The correct answer is: preparing financial statements for
engineering business units
Question 3
Incorrect
0.00 points out of 1.00
Flag question
Question
text
All of the below are correct statements regarding the process of
finding the optimal quantity to be produced, EXCEPT:
Select one:
a. Finding the optimal quantity involves taking
the first derivative and setting it equal to zero.
b. Finding the optimal quantity involves taking
a second derivative and setting it equal to zero.
c. Finding the optimal quantity involves finding
the optimal point on the demand curve.
d. Finding the optimal quantity involves writing
down an expression for calculating profit.
Feedback
Your answer is incorrect.
The second derivative can be taken to verify that we found a
maximum (if the second derivative is negative), as opposed to a minimum (if the
second derivative is positive). It doesn't make sense to set the second
derivative equal to zero.
The correct answer is: Finding the optimal quantity involves
taking a second derivative and setting it equal to zero.
Question 4
Correct
1.00 points out of 1.00
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Question
text
A company incurs total cost of $225,000 when producing 10 units,
$230,000 when producing 11 units, and $235,000 when producing 12 units of
output. What is the incremental cost of producing the 12th unit of output?
Select one:
a. $465,000
b. $5,000
c. $235,000
d. $230,000
Feedback
Your answer is correct.
Incremental cost is the additional cost from producing another
unit, or more generally from choosing one alternative over another. In the
context of this question, the additional cost of producing the 12th unit is the
increase in total cost when producing 12 units instead of 11, which is 235,000
- 230,000 = $5,000. Note that the incremental cost of producing the 12th unit
is equivalent to the variable cost of producing the 12th unit, because total
fixed cost remains unchanged.
The correct answer is: $5,000
Question 5
Correct
1.00 points out of 1.00
Flag question
Question
text
A company incurs total cost of $225,000 when producing 10 units,
$230,000 when producing 11 units, and $235,000 when producing 12 units of output.
What is its total fixed cost?
Select one:
a. $220,000
b. $200,000
c. $235,000
d. $230,000
e. $225,000
f. $175,000
Feedback
Your answer is correct.
We typically assume variable cost per unit to be constant, and
we can also see from the question that it is $5,000 per unit for units 11 and
12. Therefore, assuming a constant $5,000 variable cost per unit, we can
calculate total variable cost to be $50,000 when 10 units are produced, which
leaves $225,000 - $50,000 = $175,000 total fixed cost.
The correct answer is: $175,000
Question 6
Correct
1.00 points out of 1.00
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Question
text
Assume fixed cost equals $80,000, the selling price is $100, and
the variable cost per unit is $60. What is the contribution to profit per unit?
Select one:
a. $500
b. $2,000
c. $160
d. $40
Feedback
Your answer is correct.
The contribution margin is simply the increase in profit from
each unit, which is equal to the selling price (revenue from selling one more
unit) minus the variable cost per unit (cost of producing one more unit), which
is equal to 100 - 60 = $40.
The correct answer is: $40
Question 7
Correct
1.00 points out of 1.00
Flag question
Question
text
Which of the below would typically decrease with a larger number
of units produced?
Select one:
a. Fixed Cost per Unit
b. Total Fixed Cost
c. Total Variable Cost
d. Variable Cost per Unit
Feedback
Your answer is correct.
Total Fixed Cost is unchanged when more or less is produced.
Fixed cost per unit declines with increasing production because the total fixed
cost is divided by a larger number of units when more are produced. Total
variable cost increases with increasing production. Variable cost per unit is
typically assumed to remain unchanged with more or less produced.
The correct answer is: Fixed Cost per Unit
Question 8
Correct
1.00 points out of 1.00
Flag question
Question
text
Which of the below would typically increase with a larger number
of units produced?
Select one:
a. Total Fixed Cost
b. Total Variable Cost
c. Variable Cost per Unit
d. Fixed Cost per Unit
Feedback
Your answer is correct.
Total Fixed Cost is unchanged when more or less is produced.
Fixed cost per unit declines with increasing production because the total fixed
cost is divided by a larger number of units when more are produced. Total
variable cost increases with increasing production. Variable cost per unit is
typically assumed to remain unchanged with more or less produced.
The correct answer is: Total Variable Cost
Question 9
Incorrect
0.00 points out of 1.00
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Question
text
Tri-State Gaming Enterprises is considering developing a new
video game for gamers 12-14 years old, which is an age group that is currently
missing among its customers. Before making a decision whether to enter this new
market or not, the company conducts market research in order to better estimate
potential demand from the new age group. This market research results in a net
cash outflow of $15,000. The net cash outflow associated with this market
research is an example of
Select one:
a. Sunk cost.
b. A forced decision since not entering the new
market would result in a loss of $15,000.
c. Non-cash expense.
d. Cost that can be recovered and thus not
representing an incremental cost.
Feedback
Your answer is incorrect.
There is no indication that the cash spent on the market
research can be recovered, resulting in a $15,000 cash outflow regardless of
whether the company decides to enter the new market or not, and thus is
considered sunk cost and should not be included in the incremental cost when
deciding whether to enter the new market or not.
The correct answer is: Sunk cost.
Question 10
Correct
1.00 points out of 1.00
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Question
text
All of the relationships below are correct, EXCEPT:
Select one:
a. Variable Cost per Unit = Total Cost per Unit
- Fixed Cost per Unit
b. Variable Cost per Unit = Total Variable Cost
/ Number of Units Produced
c. Total Fixed Cost = Total Cost per Unit
x Number of Units Produced
d. Total Cost = Total Fixed Cost + Total
Variable Cost
Feedback
Your answer is correct.
Total Fixed Cost = Fixed Cost per Unit X Number of
Units Produced is the correct expression for Total Fixed Cost.
The correct answer is: Total Fixed Cost = Total Cost per
Unit x Number of Units Produced
Question 11
Correct
3.75 points out of 3.75
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Question
text
(NOTE: ENTER YOUR ANSWER WITHOUT THE $ AND COMMA, ROUNDED TO
ZERO DECIMAL PLACES, for instance as 29535, not as $29,535.623) Tulisker
Railroads needs to make a decision whether to purchase a premium service
package for one of its trucks. The package is expected to reduce the truck's
operating costs by $153 per hour of use. Assuming the truck is used 9
hours per day, calculate the expected annual savings resulting from
implementing the premium service package. Assume there are 360 working days in
a year.
Answer:
Feedback
Multiply the hourly cost reduction by the number of hours used
per day, and then multiply by the number of working days in a year.
The correct answer is: $ 495720
Question 12
Correct
3.75 points out of 3.75
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Question
text
(NOTE: ENTER YOUR ANSWER WITHOUT THE $ AND COMMA, ROUNDED TO
ZERO DECIMAL PLACES, for instance as 5358, not as $5,358.623) Perelandra
Delivery Inc. operates a fleet of delivery trucks. Two different models of
trucks are available for purchase. Model A requires an oil change every 2500
miles, while Model B requires an oil change every 10000 miles driven. Each oil
change, including the associated maintenance, material, and labor, costs $799.
Assuming each truck will be operated for 440000 miles before replaced, what is
the overall savings per truck resulting from less frequent oil changes if Model
B is used instead of Model A?
Answer:
Feedback
Need to first calculate the number of oil changes required by
each model, and then multiply the difference in the number of oil changes by
the cost of an oil change.
The correct answer is: $ 105468
Question 13
Correct
3.75 points out of 3.75
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Question
text
(NOTE: ENTER YOUR ANSWER WITHOUT THE COMMA, ROUNDED TO ZERO
DECIMAL PLACES, for instance as 5358, not as 5,358.623.) Trine Manufacturing
Holdings has estimated the following relationships between its revenues,
expenses, and the number of units sold: Revenues = 735X - 0.6, and Expenses = 64X + 4.3 + 44. the number of units sold is denoted as X in the
above equations. Calculate the number of units sold that results in maximum
profit.
Answer:
Feedback
Need to write down an equation for Revenues minus Expenses and
maximize it with respect to X. This is done by taking a derivative with respect
to X, setting equal to 0, and then solving for X.
The correct answer is: 68
Question 14
Correct
3.75 points out of 3.75
Flag question
Question
text
(NOTE: ENTER YOUR ANSWER WITHOUT THE COMMA, ROUNDED TO ZERO
DECIMAL PLACES, for instance as 5358, not as 5,358.623. Your answer will be
accepted regardless of whether you round your final answer up or down, but to
avoid a rounding error in your final answer do not round your intermediate
calculations too much.) Trine Metal is considering expanding its current
production facility to enable production of a new wire type. The expected
annual fixed cost associated with the expansion is $703000. The production of 1
roll of the new wire type will require 2 hours of labor at the rate of $28 per
hour, and $227 worth of material. If the selling price of 1 roll of the new
wire type is $5580, what is the minimum number of rolls of the wire that the
company needs to sell each year in order to make the expansion profitable?
Answer:
Feedback
Need to find the break-even quantity where profit is equal to
zero. This is done by dividing the fixed cost by the contribution to the profit
per unit sold. The contribution is calculated by subtracting the variable cost
per unit from the selling price. The variable cost per unit is equal to the
hours of labor per unit multiplied by the wage per hour, plus the cost of
material per unit.
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WEEK 4 QUIZ
Trine | Moodle
FIN--5203-2O1--OL-FA-2021 - Finance for Engineers
|
Started on |
Sunday, September
19, 2021, 12:16 PM |
|
State |
Finished |
|
Completed on |
Sunday, September
19, 2021, 1:05 PM |
|
Time taken |
48 mins 37 secs |
|
Grade |
25.00 out of 25.00 (100%) |
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