Solved: SpectroGlass Company manufactures glass for

office buildings in

SpectroGlass Company manufactures glass for office buildings in Arizona and Southern
California. As a result of age and wear, a critical machine in the production process has begun
to produce quality defects. SpectroGlass is considering replacing the old machine with a new
machine, either brand A or brand B. The manufacturer of each machine has provided
SpectroGlass these data on the cost of operation of its machine at various levels of output:

Required
1. Use the High-Low method to determine the cost equations for each machine, and then to
determine if SpectroGlass's output is expected to be 22,000 square yards, which machine
should it purchase? At 15,000 square yards? Is the High-Low method useful here? Why or why
not?
2. As a cost analyst at SpectroGlass, you have been assigned to complete requirement 1. A
production supervisor comes to you to say that the nature of the defect is really very difficult to
detect and that most customers will not notice it, so he questions replacing it. He suggests that
you modify your calculations to justify keeping the present machine to keep things the way they
are and save the company some money. What do you say?
3. Assume that machine A is manufactured in Germany and machine B is manufactured in
Canada. As a U.S.-based firm, what considerations are important to SpectroGlass, in addition to
those already mentioned in your answer to requirement 1?

ANSWER
https://solvedquest.com/spectroglass-company-manufactures-glass-for-office-buildings-in/

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