Lukas manufacturing , Strategic Management

Lukas Manufacturing is presently producing a tape holder that has a variable cost of $0.75 per unit and a selling price of $2.00 per unit.  Fixed costs are $20,000 a year.  Present volume is 40,000 units a year.  The firm can make a better product by adding a new piece of equipment to the process line.  This equipment shows an increase of $5,000 per year in fixed costs.  The variable cost would reduce to $0.25 per unit.  The volume for the latest and improved product should rise to 50,000 units a year.

(a)    Should the company invest in the latest equipment?

(b)    At what volume does the equipment choice change?

(c)    At a volume of 15,000 units, which process should be used?

Posted Date: 3/25/2013 4:15:53 AM | Location : United States







Related Discussions:- Lukas manufacturing , Assignment Help, Ask Question on Lukas manufacturing , Get Answer, Expert's Help, Lukas manufacturing Discussions

Write discussion on Lukas manufacturing
Your posts are moderated
Related Questions

Question: (a) Describe the concept of virtual organisation. (b) ‘It is critical for an organisation to attain congruence between its strategy and organisational structure

A Strategic Vision is Differ from a Mission Statement: Whereas the chief concern of a strategic vision is with "where we are going & why", a company's mission statement usua

Weakness: Though Arpanaa has the best amenities in tow which are not offered by the hotels that are located in and around the town, it runs short of few features such as non veget

Recognizing a Company's Strategy 1.   A company's strategy is reproduced in its actions in the marketplace & the statements of senior managers regarding the company's current b


Here is the "Delta Products" case for Graduate Operations. You need to determine the number of hours for Mike's and Nikki's plan. To do this you need to compute the number of hours

Payback period = total cost of investment / estimated annual revenue

explain strategy as an organisational process

The following details are available for company Z  · Share price at the beginning of the year £3.87 Share price at the end of the year £4.23 Dividend proposed and pa