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The manager of Crazy Keyboards, a low cost keyboard manufacturer, is considering 2 options for manufacturing keyboards. One is a completely manual system where the

The manager of Crazy Keyboards, a low cost keyboard manufacturer, is considering 2 options for manufacturing keyboards. One is a completely manual system where the fixed costs of operating the workshop for a month total $3,000. Each keyboard requires materials which cost $12 and takes one employee two hours to make. Employees are paid $18 an hour. The other option is to rent a machine to assist in the production of the keyboards. Doing so would increase the total fixed costs of operating the workshop for a month to $11,000. Using the machine would also reduce the employee labour time to one hour per keyboard. Employees would still be paid $18 an hour. The material costs would remain the same The keyboards are sold to a wholesaler for $60 each. Expected sales are 500 keyboards per month. Using cost volume profit analysis to inform your decision which option would provide the highest monthly profit? (Provide your workings)

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