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The salary for a plant supervisor for a manufacturing facility is $120,000 per year. The plant's capacity is 300,000 units per year.
Required
1. Prepare a table that shows how the cost of supervision behaves in total and on a per-unit basis as production increases from 0 to 250,000 units per year, using 50,000-unit increments.
2. How would you classify the behavior of the cost of supervision?
KTM and Piaggio are competitors in the global marketplace. KTM's and Piaggio's financial statements are in Appendix A.
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Adding certain controls costing $35,000 annually could reduce these losses to 0.5 percent of purchases. Should the control be recommended?
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