Need help on this problem please.

Requirements:

Based on the projections in Exhibits 1 4 for the total resource utilization of the WLRM and the BB products on their pre-existing equipment, TRIM Inc. management is still trying to determine if the new exercise equipment should be produced.

a) Determine the Target Cost for the Waist Line Reduction Machine.

b) Determine what TRIM should do. Should they:

a. Make 7,500 WLRMs?

b. Make 10,000 WLRMs?

c. Make 20,000 BBs?

d. Make the full demand for both the Bicep Builder (20,000 units) and the Waist Line Reduction Machine (10,000 units).

e. Build the full demand for the Bicep Builder (20,000

units) and the original lower volume for the Waist Line

Reduction Machine (7,500 units).

f. Make some combination of the volumes of the WLRM

and the BB based on a profit maximizing methodology.

c) For each alternative in (b) include the impact on TRIMs profit. Rank the alternatives and indicate your choice. Be sure to explain the rationale behind your choice.

d) What additional information would you like before making a decision about adding these new products?

e) How would you track the success of this or any new product line or lines?

f) How would you monitor production?

g) What information would sales need in order to promote the optimal level of product sales?

h) What would you like to know about the pre-existing product lines? How might this information change your previous responses?

Exhibit 1 Existing Cost Structure and Capacity Provided and Used and the Needs of the New Product, the WLRM Current cost, cost drivers and utilization of resources by Taylor's Reduction Improvement Machines Inc. for production of the current product lines, (without the WLRM) are as follows: Practical Capacity Capacity Activity Cost cost Driver of Resources used 200,000 10,000 Handling Material of moves 12,500 $1,200,000 12,000 Setting up Equipment set up hours 10,000 12 Designing Processes and Products 180,000 types of products 240.000 12 Designing Packaging types of products 360,000 300.000 Machining the Product machine hours 240.000 20,000 600,000 18,500 Direct Labor direct labor hours Exhibit 1 Existing Cost Structure and Capacity Provided and Used and the Needs of the New Product, the WLRM Current cost, cost drivers and utilization of resources by Taylor's Reduction Improvement Machines Inc. for production of the current product lines, (without the WLRM) are as follows: Practical Capacity Capacity Activity Cost cost Driver of Resources used 200,000 10,000 Handling Material of moves 12,500 $1,200,000 12,000 Setting up Equipment set up hours 10,000 12 Designing Processes and Products 180,000 types of products 240.000 12 Designing Packaging types of products 360,000 300.000 Machining the Product machine hours 240.000 20,000 600,000 18,500 Direct Labor direct labor hours