A toy company is planning to expand its operations by buying a new machine. They have short-listed two machines, A & B, based on the quality parameters, maintenance requirement, ease of operations etc. The production cost for each of these machines, for different production ranges is as shown in the table below. Answer the questions based on the data given. (All Costs are in Rs.)


1. If the demand varies between 600-1000 units, which machine would incur the least cost?
a) Machine A           b) Machine B               c)Both will incur the same cost                 d) none of these


2. Which of the following is true?
I. It is favourable to buy machine A if the toy demand is more than 2000 units.
II. Total cost of making 1500 units of toys by the machines A and B differ by Rs. 175
a ) Only I                   b ) Only II                                c) both I & II                                        d) None

3. What is the minimum per unit cost of production for these machines?
a) 2.24                        b) 2.4                                        c)2.22                                               d)2.45

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