Suppose that ikea the swedish retailer is developing a new

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Suppose that ikea, the Swedish retailer, is developing a new chair targeted to sell for less than $100 and it is considering the two production alternatives that follow. Rank the alternatives, assuming that the company's minimum desired profit is 30 percent over total production costs.
Alternative Alternative.

  • Direct material cost $35 $20
  • Direct labor cost 1hr at $12 per hr 2hr at $8 per hr
  • Overhead cost 200% of direct $2 per dollar of direct
  • Labor cost materials

Reference no: EM13601114

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