City Guilds Model Questions Vol1 2020 Engineering Question 31

Practice objective / multiple choice question 31 from the 2020 City Guilds Model Questions Vol1 Engineering examination.

City Guilds Model Questions Vol1 2020 Engineering Objective / Multiple Choice Hard Difficulty
Question 31 CITY_GUILDS_MODEL_QUESTIONS_VOL1 • 2020 • ENGINEERING • objective

A component can be produced by either CNC milling or injection moulding. CNC has a setup cost of \(150{,}000\) N and a unit cost of \(45\) N, while injection moulding has a setup cost of \(30{,}000\) N and a unit cost of \(70\) N. (a) Determine the minimum annual demand for which CNC becomes cheaper than injection moulding. (b) If the actual annual demand is \(4{,}500\) units, which process should be chosen and what is the cost difference between the two processes (CNC cost minus injection‑moulding cost)?

Answer Options

Correct Answer A. Break‑even demand = 4 800 units. For 4 500 units the injection‑moulding process is cheaper; the cost difference is 7 500 N (injection moulding costs 7 500 N less than CNC).
B. Break‑even demand = 5 200 units. For 4 500 units the CNC process is cheaper; the cost difference is 6 000 N (CNC costs 6 000 N less than injection moulding).
C. Break‑even demand = 4 200 units. For 4 500 units the injection‑moulding process is cheaper; the cost difference is 3 000 N (injection moulding costs 3 000 N less than CNC).
D. Break‑even demand = 4 800 units. For 4 500 units the CNC process is cheaper; the cost difference is 7 500 N (CNC costs 7 500 N less than injection moulding).
Correct Answer
A
Correct Option:
Break‑even demand = 4 800 units. For 4 500 units the injection‑moulding process is cheaper; the cost difference is 7 500 N (injection moulding costs 7 500 N less than CNC).

About This Question

This is City Guilds Model Questions Vol1 2020 Engineering Question 31. It is one of the objective questions from the 2020 City Guilds Model Questions Vol1 Engineering examination.

Difficulty level: Hard .

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