Question: This assignment does not count toward the final grade. MANAGEMENT DECISION-MAKING Submit Assignment Due Thursday by 11:59pmPoints 10 Submitting a file upload Available until Apr
This assignment does not count toward the final grade. MANAGEMENT DECISION-MAKING Submit Assignment Due Thursday by 11:59pmPoints 10 Submitting a file upload Available until Apr 4 at 11:59pm Decision-Making Across the Organization BYP5-1 (pg. 218) Creative Ideas Company has decided to introduce a new product. The new product can be manufactured by either a capital-ntensive 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. Capital- Intensive $5 per unit $6 per unit $3 per unit $2,524,000 Labor-Intensive $5.50 per unit $8.00 per unit $4.50 per unit $1,550,000 Direct materials Direct labor Variable overhead Fixed manufacturing costs Creative Ideas' market research department has recommended an introductory unit sales price of $32. The incremental selling expenses are estimated to be $502,000 annually plus $2 for each unit sold, regardless of manufacturing method Instructions Answer the following. (a) Calculate the estimated break-even point in annual unit sales of the new product f Creative Ideas Company uses the: (1) Capital-intensive manufacturing method (2) Labor-intensive manufacturing method. (b) Determine the annual unit sales volume at which Creative Ideas Company would be indifferent b he two manufacturing methods
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