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Answer Page for Selected Problems
Provide only your final answers (for example, the final numbers, selection, etc.) to the following problems. Remember to show your work and answers for these problems on the problem pages.
Example only: the break-even point is 100,000 units as this is the point where the cost of the two options is equal. Below that level we prefer option A and above that we would use option C
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1. (22 points)
Airphone, Inc., manufactures cellular telephones at a processing cost of $47 per unit. The company produces an average of 250 phones per week although there are 16% defective phones. Each phone takes one hour to make.
