Short-term decision-making problem, Other Management

Assignment Help:

A company manufactures and sells a single product. The variable cost of the product is Rs 2.50 per unit and all production each month is sold at a price of Rs 3.70 per unit. A potential new customer has offered to buy 6,000 units per month at a price of Rs 2.95 per unit. The company has sufficient spare capacity to produce this quantity. If the new offer is accepted, sales to existing customers are expected to fall by two units for every 15 units sold to the new customer.

Required:

(a) Should the new offer be accepted and if accepted what would be the overall increase in monthly profit.

(b) In the short-term decision-making context, which ONE of the following would be a relevant cost?

- Specific development costs already incurred.
- The cost of special material which will be purchased.
- The original cost of raw materials currently in inventory which will be used on the project.

(c) Briefly illustrate what you understand by the term "sunk cost".


Related Discussions:- Short-term decision-making problem

Quality assurance plan, Q uality assurance plan The quality assurance ...

Q uality assurance plan The quality assurance plan is to establish the goals, the process and the responsibilities needed to implement the effective quality assurance function

Forms of centralisation - library management, Forms of Centralisation   ...

Forms of Centralisation   In centralised cataloguing we observe that there are several forms of centralisation like:  Card (or Sheaf) service  MARC (Machine-Readable C

Academic benefits for regular education, 1. What instructional technology a...

1. What instructional technology and techniques does research prove are beneficial? Detrimental? 2. Does moving students from single-gender education to co-ed increase student achi

Hpothesis, consider the use of metal detector in air port to test people fo...

consider the use of metal detector in air port to test people for concealed weapon .in essence his is a form of hpothesis testing

Constraints - requirements of resource sharing library netwo, Constraints ...

Constraints There are a number of constraints under which resource sharing networks must operate. Some of these are briefly discussed in this section. Of course, these constra

Discuss the major joints of thorax and pelvis, Question 1 Describe the ...

Question 1 Describe the external features of the heart. Add a note on circulation of blood within the heart 2 Discuss the major joints of thorax and pelvis 3 Explain the

Human resource management, is it a good process if the human resource manag...

is it a good process if the human resource management adapt the long selection process to recruit the employer

Improve public sector performance, QUESTION 1 A core concept in implem...

QUESTION 1 A core concept in implementing TQM is Deming's 14 points, a set of management practices to help companies increase their quality and productivity. List 7 points and

Property Management, ‘Property management is more about managing an asset t...

‘Property management is more about managing an asset than managing a building: discuss with reference to the role of a commercial property manager.’ Prepare an essay or discussion

Functions of documentation and information centres, FUNCTIONS OF DOCUMENTA...

FUNCTIONS OF DOCUMENTATION AND  INFORMATION CENTRES: In general, a documentation or an, information centre brings to the attention of specialist users the current as well as r

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