Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Weston Industrial Manufacturing Products ("WIMP") has the capability to produce a variety of industrial products, including a number of types of widgets. In the past, WIMP has manufactured 2 different types of widget (Type A and Type B). Each of these is sold in a market that approximates a perfectly competitive market. Production is limited to standard shifts operating Monday through Friday due to a contract with the relevant labor union. The average labor rate is $10 per hour and the company currently employs 10 laborers who work a single 8-hour shift each day. The company employs several salaried marketing and administrative employees. The following table provides price and cost data collected from the accounting department:
WIMP: Per-Unit Price and Cost Data by Widget Type
Type A
Type B
Gizmo Widget
Price
100
90
See marketing estimates
Labor
40
20
Materials
50
SGA
8
4
Depreciation
18
WIMP has recently developed a new widget, the "Gizmo Widget." The Gizmo Widget is designed to serve a niche demand segment in the manufacturing industry. Labor costs are relatively low but this is partially offset by higher materials costs. The company recently upgraded machinery to enable the Gizmo Widget to be produced and this is reflected in higher depreciation charges. WIMP's marketing staff produced the following sales projections regarding the Gizmo Widget:
Projected Weekly Sales (# units)
180
160
140
120
80
170
In the short run, WIMP cannot add to its labor force of ten employees and consequently there are only 80 labor hours available per day to allocate toward widgets.
1. Which costs in the table of accounting information are relevant for making short-run economic decisions regarding the production mix of widgets? Explain and show.
2. Ignore the Gizmo Widget for the moment. How should WIMP be allocating production between the Type A and Type B widgets? Be sure to briefly explain your approach/reasoning.
3. What is the profit maximizing number of Gizmo Widgets that should be introduced? Be sure to account for the fact that Gizmo Widgets displace other types of widgets. Again, be sure you provide a brief explanation of your approach/reasoning.
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4
do you think that dimnishing returns to a factor are consistent with increasing returns to scale? explain with suitable diagram and reasoning.
The monetary calculate of the welfare associated with the change in the provision of some good. It is not to be confused with monetary value, unless the latter is explicitly desig
Suggestions For the last 60 years the Bretton Woods institutions have played an essential role in ensuring global financial stability and fostering economic growth and develop
what is fractional reserve and how does it affect money supply?
factors influencing the conditions of demand for a given product
Short run equilibrium - Perfect competition: In the short-run, the perfectly competitive firm maximizes its profit by producing output where MC=MR=P. This is shown in the diag
When is tax to society cause a deadweight loss? Applying Consumer and Producer Surplus: The Efficiency Costs of a Tax A tax causes a deadweight loss to society, since les
The recent flooding in the upper Midwest destroyed a important proportion of the corn crop. Though, it has been discovered that corn oil is far better in keeping cholesterol withi
How to calculate: fixed cost is $1,000,000 tvc $4,400,000, avc is $22, atc $27, worker productivity is 4. How do I calculate the profit or loss?
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd