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A civil engineer has been promoted to manager of the engineered public systems section of the the company he works for. One of the products
A civil engineer has been promoted to manager of the engineered public systems section of the the company he works for. One of the products of this section is an emergency intercept pump for potable water. If the tested water quality or volume varies by a preset percentage, the pump automatically switches to preselected options of treatments or water sources. The manufacturing process for the pump had the costs over a one-year period identified in table 6. Some of the costs were measured;others have had to be estimated due to the sharing of resources with other products. The engineer is keen to expand the market for the pumps and is looking to potential overseas buyers. (a) Determine the minimum revenue per unit to break even at the current production volume of 5,000 units per year. (b) If selling internationally and to large corporations is pursued, an increased production of 3,000 additional units will be necessary. Determine the revenue per unit if a (before tax) profit goal of $500,000 is set for the entire product line. If the desired profit figure is an after tax one of $500,000 recalculate the required revenue figure (assume a tax rate of 30%). (c) Comment on the appropriateness of the profit goal
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