Decision Making Across Your Organization

Broadening your perspective 18-1 “Decision Making Across Your Organization”

BYP 18-1 Martinez Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows.

Need a Professional Writer to Work on this Paper and Give you Original Paper? CLICK HERE TO GET THIS PAPER WRITTEN

Capital-Intensive                  Labor Intensive

Direct Materials                                $5 per unit                             $5.50 per unit

Direct Labor                                      $6 per unit                             $8.00 per unit

Variable Overhead                          $3 per unit                             $4.50 per unit

Fixed manufacturing costs                        $2,508,000                            $1,538,000

Martinez’s market research department has recommended an introductory unit sales price of $30. The incremental selling expenses are estimated to be $502,000 annually plus $2 for each unit sold, regardless of manufacturing method.

 

  1. Determine the annual unit sales volume at which Martinez Company would be indifferent between the two manufacturing methods.

 

In not more than 170 words answer the above question in (a)

Need a Professional Writer to Work on this Paper and Give you Original Paper? CLICK HERE TO GET THIS PAPER WRITTEN

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Order Now

Top