Should super cables buy the new equipment

Assignment Help Operation Management
Reference no: EM132320798

Super Cables Inc. is currently manufacturing an adapter that has a variable cost of $0.55 per unit and a selling price of $1.10 per unit. Fixed costs are $14,000. Current sales volume is 30,000 units.

The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $7,000 on the top of the original $14,000. Variable costs would increase to $0.65, but sales volume should jump to 50,000 units due to a higher-quality product.

1. What's the Break Even Point for adding the new equipment?

2. Should Super Cables buy the new equipment?

Reference no: EM132320798

Questions Cloud

Exponential smoothing model : An exponential smoothing model with year 1 forecast of 380 and a= 0.3.
Assess the process : Base your analysis on the eight samples below (the dimension that was measured was part length):
Identify a better way to handle these gas tanks : Management would like to identify a better way to handle these gas tanks. How can the handling operation be improved?
Should super cables buy the new equipment : 1. What's the Break Even Point for adding the new equipment? 2. Should Super Cables buy the new equipment?
Should super cables buy the new equipment : 1. What's the Break Even Point for adding the new equipment? 2. Should Super Cables buy the new equipment?
Scan individual through a metal detector : 1. Verify ID and boarding pass 2. Scan individual through a metal detector
Process time of the process in minute : The capacity rates of the machines are as follows, 1, 3, 5, and 6 units per hour. What is the process time of the process in minute/unit?
Balancing risk and profitability : What does it mean when you are planning and implementing management resources while balancing risk and profitability?
What is the inter-arrival time of the customers : What is the inter-arrival time of the customers at the bank?

Reviews

Write a Review

Operation Management Questions & Answers

  Would you opt to pursue related diversification

To what extent, if any, have you and your co-managers adapted your company's strategy to take shifting exchange rates into account?

  Cultural misunderstanding is common in doing business

Cultural misunderstanding is common in doing business globally because managers tend to use their own cultural values and priorities when they make decisions.

  Create a hierarchy of five of the most important topics

Create a hierarchy of five of the most important topics of human resource project. Give a detailed rationale for each of the five topics.

  What are some potential benefit of managing the supply chain

What are the key factors that help an organization decide what type of framework they should use to develop the supply chain?

  Global value chain and domestic value chain

Determine the average guest check. Choose an example of a global value chain and an example of domestic value chain.

  Assigned to develop new pediatric oncology service line

You are a member of a hospital project team assigned to develop a new pediatric oncology service line. Your team is expected to develop a business plan for presentation to the senior management team and the hospital board. As a team member, what alte..

  Supply chain management through use of inventory management.

Analyze a company’s global supply chain management through use of inventory management.

  What types of application software packages

What is the advantage of using an application software package rather than developing a software program from scratch? What types of application software packages could you use in your organization?

  Is forest view mall liable for harrys injuries

Forest View Mall hired Mike to act as Santa Claus in the mall. After a tough work day, Mike stopped in a bar in the mall and drank 6 beers. Driving home, still wearing his Santa suit, Mike hit Harry, a pedestrian and severely injured her, when Harry ..

  Describe how business intelligence can be used to support

Describe how business intelligence can be used to support problem-solving and decision support in the case study organization.

  What way have historical anchors played a role in example

In what way have historical anchors played a role in the example that you provided, if at all? why According to Campbell, Whitehead and Finkelstein,

  Explain the four principles of lean operating systems

Explain the four principles of lean operating systems. Discuss three of the major challenges faced by business analysts when doing their job.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd