Result of a higher-quality product

Assignment Help Operation Management

Reference no: EM131039583

An electronics firm is currently manufacturing an item that has a variable cost of $0.45 per unit and a selling price of $1.05 per unit. Fixed costs are$15,000 per month. Current volume is 35,000 units per month. The firm wants to improve the product quality by adding a new piece of equipment at an additional fixed cost of $5,600 a month. Variable cost would increase to $0.70 and the selling price would be revised to $1.25 with the expectation that the volume would be 55,000 units as a result of a higher-quality product

if the firm does not add new equipment, its profit will be?

if the firm does add new equipment, its profit will be?

Based on the given information, the decision should be to?

Reference no: EM131039583

Questions Cloud

Both countries both produce and consume two goods : Suppose there are two countries of equal size, Northampton and Southampton. Both countries both produce and consume two goods: food and clothes. If both countries used all their resources to produce only food, Northampton would produce 50 tons while ..

Have you ever been part of a continuous planning process : Have you ever been part of a continuous planning process? If so, what did that look like at your firm and how were your plans implemented? If not, think of a firm with which you have familiarity that did not use continuous planning, and explain how i..

Costly court cases over alleged discrimination-harassment : In order to avoid costly court cases over alleged discrimination, harassment, or other employment law violations, some employers are requiring employees to agree in advance to waive their rights to court action and to instead arbitrate these claims. ..

Creating specific-measurable-achievable-realistic : Illustrate the value of a training needs assessment in an organization in general, supporting your response. Describe the components of a needs assessment used to determine the training requirements of a Customer Service – CARE Business Partner at Ma..

Result of a higher-quality product : An electronics firm is currently manufacturing an item that has a variable cost of $0.45 per unit and a selling price of $1.05 per unit. Fixed costs are$15,000 per month. Current volume is 35,000 units per month. Variable cost would increase to $0.70..

Display the sensitivity and relative performance of the test : The graph of beta as a function of the parameter under H0 is called an Operating Characteristic (OC) curve in the field of quality control (QC). These curves are used extensively in industrial applications of hypothesis testing to display the sensiti..

Garden equipment are produced at manufacturing facilities : Small motors for garden equipment are produced at four manufacturing facilities and need to be shipped to three plants that produce different garden items (lawn mowers, rototillers, leaf blowers). The company wants to minimize the cost of transportin..

Discuss the various elements of strategic leadership : Discuss the various elements of strategic leadership. Do you believe that one’s propensity to become a leader is an acquired skill or that the ability to be a leader is something that individuals are born with? How well do you know yourself?

Manual for the maintenance of large industrial freezer room : Write a manual for the maintenance of a large industrial freezer room with dimensions of 40m wide x 60m long x 8 m high. The room is kept at a temperature of -20oC. The company uses forklifts inside the freezer.

User Account

All Pages