The Dorben Co. is deciding whether it is worth releasing a new 'improved' model of its Widget.

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The Dorben Co. is deciding whether it is worth releasing a new 'improved' model of its Widget. The following details have been collected:

Standard time (min) = 1.00

Direct material costs er widget = $0.50

Direct labor costs per widget = $1.00

Indirect labor costs per widget = $0.50

Expense labor costs per widget = $0.50

Fixed overhead costs including sales costs/year = $50,000

a) Plot the prime cost as a function of production

b) Plot total costs as a function of production

c) Given a sales price of $3.00/widget, how many widgets must Dorben sell to make a profit? Show this point on the plot.

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Niebels Methods, Standards and Work Design

ISBN: 978-0073376318

13th edition

Authors: Andris Freivalds, Benjamin Niebel

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