Find what is the minimum unit price, Operation Management

Assignment Help:

An electronics firm is currently manufacturing an item that has a variable cost of $.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000 per month. Current demand volume is 360,000 units per year. The firm can substantially improve the product quality by adding a new piece of equipment at an additional monthly fixed cost of $6,000. Variable cost would also increase to $.60 per unit, but annual demand volume is also expected to jump to 600,000 units due to the improved product quality. a. Based on the above information, determine whether the addition of the new equipment is a profitable proposition for the company. b. What is the minimum unit price that would render profitable the addition of the new equipment? Demonstrate clearly all the calculations that support your answers to the above questions.


Related Discussions:- Find what is the minimum unit price

Explain security professionals as technology advances, Identify potential e...

Identify potential ethical challenges that may be faced by security professionals as technology advances, applications become more mobile, and computer criminals become more innova

Explain investment triple itself, At what rate of interest, compounded annu...

At what rate of interest, compounded annually, will an investment triple itself in (a) 8 years ? (b) 10 years? (c) 12 years?

Determine the appropriate sample size - process design, The following work ...

The following work sampling data was collected from observing a retail assistant:  Activity                                                Number of observations Attending to

Explain function of operational leadership, Create a scenario that depicts ...

Create a scenario that depicts how the first line leader should act to fulfil the purpose and function of operational leadership in his or her area

Modern global business environment, Describe briefly, major opportunities f...

Describe briefly, major opportunities for an organisation operating in a modern global business environment.   There are several significant opportunities for an organisation o

Explain what is the minimum number of workstations, An assembly line with a...

An assembly line with a number of tasks is to be balanced. The sum of the task times is 62 minutes. The line will operate for 6 hours per day. What is the minimum number of worksta

Explain expression for total revenue, There is a fixed cost of$50,000 to st...

There is a fixed cost of$50,000 to start a production process. Once the process has begun, the variable cost per unit is $25. The revenue per unit is projected to be $45. Expressio

Explain change effect medical institutions, In your opinion do you think To...

In your opinion do you think Tort Reform will benefit the patients or the medical practitioners? How will this change effect medical institutions?

Quality management systems - improving productivity, Quality Management Sys...

Quality Management Systems - Improving Productivity The introduction of approaches such as ISO 9000; Total quality management, business process reengineering, just-in-time ope

Explain another name for a cause-and-effect diagram, Another name for a cau...

Another name for a cause-and-effect diagram is which of the following? Histogram Run chart Check sheet Fishbone diagram

Write Your Message!

Captcha
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