What is the value of this annual profit

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Reference no: EM131354707

Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data:

Process Type	Annualized Fixed cost of Plant & Equip.	Variable costs (Per Unit) (s)
Process Type	Annualized Fixed cost of Plant & Equip.	Labor	Material	Energy
Mass Customization	$1,260,000	30	18	12
Intermittent	$1,000,000	24	26	20
Repetitive	$1,625,000	28	15	12
Continuous	$1,960,000	25	15	10

Metters Cabinets projects an annual demand of 24,000 units for the Maxi stand. The Maxi stand will sell for $120 per unit.

a) Which process type will maximize the annual profit from producing the Maxi stand?

b) What is the value of this annual profit?

Reference no: EM131354707

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