A security alarm manufacturer expects total annual fixed cost of 180,000,000. The security alarm has a variable
Question:
A security alarm manufacturer expects total annual fixed cost of 180,000,000. The security alarm has a variable cost of 2,700 with a selling price of 4,500.
i. Calculate how many devices should be sold to break-even.
ii. Calculate profit to earn by selling 120,000 alarms.
iii. The manufacturer has further noted that same plant (as it is under-utilized) can also be used to manufacture a component in a fire alarm and vehicle alarm. The plant’s maximum annual operating capacity is 40,000 hours. The selling price, variable cost, and demand data are shown in Table Q4-1. Prepare a production plan, if the manufacturer has already signed a contract for 15,000 security alarm components, and 40,000 Fire alarm components and vehicle alarm components.
Operations Management Processes and Supply Chains
ISBN: 978-0132807395
10th edition
Authors: Lee J. Krajewski, Larry P. Ritzman, Manoj K. Malhotra