What is the profit or loss of the current process

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Reference no: EM131921860

A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit.

The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand).

The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit. If a price of $80 will allow 400 units to be sold.

What is the profit (or loss) of the current process?

Reference no: EM131921860

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