Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help me solve these questions Decision-Making Across the Organization CT5.1 Creative Ideas has decided to introduce a new product. The new product can be

please help me solve these questions
image text in transcribed
Decision-Making Across the Organization CT5.1 Creative Ideas has decided to introduce a new product. The new product can be manufactured by either a capital-intensive 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 Labor- Intensive Intensive Direct materials R$350 per unit R$385 per unit Direct labor Rs420 per unit Rs560 per unit Variable overhead Rs210 per unit Rs315 per unit Fixed manufacturing costs Rs176.680,000 R$108,500,000 Creative Ideas' market research department has recommended an introductory unit sales price of Rs2,240. The incremental selling expenses are estimated to be Rs35,140,000 annually plus Rs 140 for each unit sold, regardless of manufacturing method. Instructions With the class divided into groups, answer the following a. Calculate the estimated break-even point in annual unit sales of the new product if Creative Ideas uses the: 1. Capital-intensive manufacturing method, 2. Labor-intensive manufacturing method. b. Determine the annual unit sales volume at which Creative Ideas would be indifferent between the two manufacturing methods. c. Explain the circumstance under which Creative Ideas should employ each of the two manufacturing methods

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Exploring Strategic Change

Authors: Julia Balogun, Veronica Hope Hailey, Stafanie Gustafsson

4th Edition

0273778919, 9780273778912

More Books

Students also viewed these Accounting questions

Question

What are the advantages and disadvantages of flextime?

Answered: 1 week ago

Question

What could Kathy have done to keep the situation from occurring?

Answered: 1 week ago

Question

How can Seaview improve their benefits communication? Discuss.

Answered: 1 week ago