Determine the monthly units Karak Company should sell

Assignment Help Accounting Basics

Reference no: EM132805242

Question - Karak Company produces Product (A) for only domestic distribution since year 2017. In 2019, a similar product to Karak Company has come onto the market by another competitor. Karak Company is keen to compete with the new competitor by increasing the production and sales of product (A) without any changes on the selling price, as the selling price is JOD 6 per unit in the market.

The maximum production capacity in Karak's factory is 32,000 units of Product (A) each month. The variable cost to manufacture one unit of the product would be JOD 2.5, and the traceable fixed costs of Product A is JOD 70,000 per month. The CEO of Karak Company is confident that the demand for Product (A) will exceed the 32,000 units that the company is able to produce. Therefore, he should think of producing additional quantities of the product through having extra space area. This extra space area can be rented by the company for JOD 2,000 per month. Moreover, the variable cost to manufacture one unit of the product will also increase by JOD 0.30 per unit.

The CEO of Karak Company has decided to rent the new space to produce additional quantities of product A but he could not determine the monthly needed quantities. Therefore, the CEO asked you to determine the monthly units Karak Company should sell to cover all fixed and variable costs for Product (A).

Reference no: EM132805242

Questions Cloud

Find the consignor profit from sales of consigned goods : Karen Mfg. Corporation consigned 10 units of washing machines costing P3,600 each to Kulin Marketing Corporation. Find the consignor profit from sales

Why is blue apron experiencing its current problems : What changes and adjustments should Brad Dickerson (CEO) make? Discuss your recommendations for Blue Apron and can they be successful?

Explain major components of blockchain : Explain the major components of blockchain. Be sure to include how blockchain is affecting a global economy and how you see it growing in the future.

Determine the frame size and output data rate of the tdm : A synchronous TDM combines 10 digital sources where each has data rate of 500-kbps. Each output slot carries 4 bits from each digital source, but one extra bit.

Determine the monthly units Karak Company should sell : Therefore, the CEO asked you to determine the monthly units Karak Company should sell to cover all fixed and variable costs for Product (A)

How two different trends in marketing can influence consumer : How two different trends in marketing can influence consumer behaviour? Illustrate your answer using consumer behaviour theory and recent examples.

Why would a firm want to measure profits by segment : Why would a firm want to measure profits by segment? How would common costs be allocated to each of a company's segments?

Discuss the financial benefits of chatbots : Some people say that chatbots are inferior for chatting. Discuss the financial benefits of chatbots. Compare the IoT with regular Internet.

Examine what kind of data you plan to use : Write a 7-8-page APA formatted paper on a business problem that requires data mining, why the problem is interesting, the general approach you plan to take.

User Account

All Pages