Break even quantity when considering the choice of a CNC Lathe against a Centre Lathe
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Break even quantity when considering the choice of a CNC Lathe against a Centre Lathe

[From: ] [author: ] [Date: 11-05-20] [Hit: ]
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Not sure how to answer this question in a exam pastpaper, does anyone have a solution?

The question is...

What would be the break even quantity when considering the choice of a CNC Lathe against a Centre Lathe given the folling information.

Centre Lathe
Set-Up Time: 1 hour
Operating Time: 10 mins
Operating Labour Costs: £20/hour
Tooling Costs: Nil
Machine Overheads: £40/hour

CNC Lathe
Set-Up Time: 2 hours
Operating Time: 2 mins
Operating Labour Costs: £20/hour
Tooling costs: £450
Machine Overheads: £60/hour

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Calculate total job cost:
C=setup_time*(labor+overhead) + batch_size*operating_time*(labor+overhea… + tooling
1*(20+40) + B*(10/60)*(20+40) +0 = 2*(20+60) + B*(2/60)*(20+60) + 450
60+10B=160+(8/3)B + 450
B=75
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