Sold for the worst-case without outsourcing

Assignment Help Financial Accounting

Reference no: EM133433348

Question: FAY Technologies is deciding whether it should begin production of a new toy robot. It has manufactured children's toys before but nothing as advanced as its latest robot so historical data is at a minimum. The company believes that they can secure the materials for manufacture for between $65-85 per unit and labor costs would be between $15-25 per unit. Management's expectations are that materials will cost $70 per unit and labor $25 per unit and that 800 units will be sold monthly.

Should FAY decide to manufacture the robots in-house, maintenance of the factory machine would cost $15,000 per month. However, management has found that another alternative is for the company to outsource the labor for a flat rate of $35 per unit. The company expects to sell between 750-1000 units per month initially at a price of $149.

Provide recommendations for FAE technologies that will maximize profit. Also include base, worst, and best case scenario calculations and provide a scenario summary. Be sure to also consider the outsourcing alternative and make a recommendation on which alternative has the most profit potential. Lastly, include a breakeven amount of units sold for the worst-case without outsourcing.

Reference no: EM133433348

Questions Cloud

Prepare the master budget of the company : As of the end of last year, your company had the following balance sheet. Prepare the Master Budget of the company

What struggles needs do individuals in this population face : What struggles/needs do individuals in this population face? What programs exist in your local community that address the needs of the selected population?

What would be the effect of operating income : selling expenses as a result of the special order. What would be the effect of operating income if the special order could be accepted without affecting normal

Define the role to play in identifying, preparing for : Define the role to play in identifying, preparing for, and implementing change to prepare for future growth in a facility, specifically, the HR role

Sold for the worst-case without outsourcing : make a recommendation on which alternative has the most profit potential. Lastly, include a breakeven amount of units sold for the worst-case without outsourcin

What are some of the new emerging worker decision making : What are some of the new emerging worker decision making models that allows USA and Japanese workers to be part of decision making in organizations?

What is the assessment of servqual results : Provide assessment of the Gaps model from any organization in the Pacific Island Countries (Organization's response)

What can hr professionals do to mitigate concerns about : What can HR professionals do to mitigate concerns about pregnancy discrimination in the workplace? What does the law say companies need to do to avoid violating

Describe the labour relations board reasoning : Describe the labour relations board's reasoning on the question of whether remedial certification should be ordered. What remedies other than remedial

User Account

All Pages