Which alternative would you recommend to the company

Assignment Help Microeconomics

Reference no: EM133465861

Assignment

Length: 3 to 4 pages.

You are an economist for the Vanda-Laye Corporation, which produces and distributes outdoor cooking supplies. The company has come under new ownership and management and will be undergoing changes in its product lines and operating structure. As an economist, your responsibilities include examining the market factors that affect success or failure of a product, including the supply and demand for the product, market conditions, and the behavior of competitors with similar products.

The new owners are evaluating the operating structure, and you have two possible alternatives. One alternative requires a high level of investment in fixed costs compared to the other alternative. Jorge, your supervisor, has assigned you the task of evaluating the two alternatives.

Assume that the company has no debt. Regardless of the alternative selected, market conditions will require the selling price of the product to be $3.45 per unit. The details for each alternative are given in the table.

Task:

Jorge has asked you to provide detailed responses to the following questions:

Question 1. Analyze how the CVP analysis helps management in the planning stage of a new business.

Question 2. What is the break-even quantity for each of the investment alternatives?

Question 3. Analyze the breakeven differences between the two alternatives. What does the breakeven quantity tell you?

Question 4. Which alternative would you recommend to the company? Explain the pros and cons of each alternative and the reasons for your selection.

Reference no: EM133465861

Questions Cloud

Strategic management analysis of real-world company : Conduct a strategic management analysis of a real-world company or organization.

How people lived in the paleolithic and the neolithic period : how people lived in the Paleolithic and the Neolithic periods. In a concluding few sentences explain how we know the advantages/disadvantages you mentioned

What is central purpose of legislative branch : What is central purpose of Legislative Branch? How do the institutional rules, powers, and practices of the Legislative Branch help accomplish purpose?

When is it advantageous to hire employees who are already : Do you agree or disagree with the following statement? Defend your answer: "Money is the most important tool that a manager has for motivating employees.

Which alternative would you recommend to the company : Which alternative would you recommend to the company? Explain the pros and cons of each alternative and the reasons for your selection.

Examine southwest current hr practices : Examining current practices - Talent recruitment and selection - Strategy recommendation - Your first task is to examine Southwest's current HR

Internal study by the technology services : An internal study by the Technology Services department at Lahey Electronics revealed company employees receive an average of 6.4 non-work-related

Qualitative or quantitative methods : Choose between Qualitative or Quantitative Methods. tell us why you chose the specific methodology.

Which theories are most likely to influence monetary policy : Which theory, or theories, are most likely to influence a monetary policy that encourages inflation and spending on final goods and services?

User Account

All Pages