What are the additional costs of choosing the new lens

Assignment Help Cost Accounting

Reference no: EM13936966

Quality improvement, relevant costs and relevant revenues. (25 minutes)

Braganza manufactures and sells 20 000 copiers each year. The variable and fixed costs of reworking and repairing copiers are as follows:

	Variable costs	Fixed costs	Total costs
Rework costs per copier	€1600	€2400	€4000
Repair costs per copier
Customer-support costs	80	120	200
Transportation costs for
repair parts	180	60	240
Warranty repair costs	1800	2600	4400

Braganza's engineers are currently working to solve the problem of copies being too light or too dark. They propose changing the lens of the copier. The new lens will cost €50 more than the old lens. Each copier uses one lens. Braganza uses a one-year time horizon for this decision, since it plans to introduce a new copier at the end of the year. Braganza believes that even as it improves quality, it will not be able to save any of the fixed costs of rework or repair.

By changing the lens, Braganza expects that it will (1) rework 300 fewer copiers, (2) repair 200 fewer copiers and (3) sell 100 additional copiers. Braganza's unit contribution margin on its existing copier is €6000.

Required

1. What are the additional costs of choosing the new lens?

2. What are the additional benefits of choosing the new lens?

3. Should Braganza use the new lens?

Reference no: EM13936966

Questions Cloud

Extensive look at the internal positioning of this company : Using the retailer chosen from your second assignment (pound land), undertake a comprehensive and extensive look at the internal positioning of this company in regards to how it is dealing with the issues identified and discussed in the second ass..

Explain how extracting a single evolutionary progression : Explain how extracting a single evolutionary progression from a fossil record can be misleading. How do you think this has affected the publics' opinion of evolution as a scientific theory?

What is the value of v : What is the value of v?

Identify the employers labour relations strategy : Identify the employer's labour relations strategy, and explain possible reasons for this strategy.

What are the additional costs of choosing the new lens : What are the additional costs of choosing the new lens? What are the additional benefits of choosing the new lens? Should Braganza use the new lens?

C program containing a linked list of ten integer numbers. : Write a C program which defines and uses a macro min(x,y) that, when given two numbers, returns the smaller of the two.

Concise statement of the nature of the project : A brief description (a paragraph of 100-200 words) providing the project background/context. e.g. is it based on a business need? a technical need? does it arise from the interests of a particular person/company?

Program to check the account status : Place the account record into an appropriate structure, and store the accounts in an array of structures.

What conditions on early earth made it possible life develop : Address the key evolutionary adaptations that arose as life colonized on land. What conditions on early Earth made it possible for life to develop? How have those adaptations and conditions influenced life on Earth as it is today?

User Account

All Pages