Product quality by adding new piece of equipment

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Reference no: EM132134910

An electronics firm is currently manufacturing an item that has a variable cost of $ 0.45 per unit and a selling price of $ 0.95 per unit. Fixed costs are $ 15, 000. Current volume is 35,000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $ 6, 000. Variable cost would increase to $ 0.70 and the selling price would be revised to $ 1.05 with the expectation that the volume would be 50,000 units as a result of a higher-quality product. If the firm does not add new equipment, its profit will be = nothing dollars (round your response to the nearest whole number and include a minus sign if the profit is negative). If the firm does add new equipment, its profit will be = nothing dollars (round your response to the nearest whole number and include a minus sign if the profit is negative). Based on the given information, the decision should be to ?

Reference no: EM132134910

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