Determine break-even level of output for each of processes

Assignment Help Operation Management

Reference no: EM131793316

A company is considering investing in one of the production processes identified below. The company anticipates charging $12 each for each new unit of output it will produce.

First process FC = 170,000 VC = 7$/unit

Second process FC 200,000 VC =$6/unit

A. Determine the break-even level of output for each of the processes.

B. If the company CFO, “Rowdy” Rob Robert’s goal is to make a target profit of $100,000, determine which process requires producing and selling the smaller quantity to achieve this target.

C. Suppose the company’s new CEO, “Trembling Joe” Green thinks that a profit of $50,000 is a safer bet than the CFO’s estimate. Overruling the CFO, Green wants to know which process requires a lower level of production to achieve his target profit.

Reference no: EM131793316

Questions Cloud

How would waterloo''s reported net income have : How would Waterloo's reported net income have been different in each of these two years if the investment had been reported as a trading security

How much depreciation expense will cameron company recognize : How much depreciation expense will cameron company recognize on this piece of equipment during year 4

Discuss gaap financial reporting meet the test of integrity : This is one of many discussions which you may optionally choose for one of your responses. Does our current GAAP financial reporting meet the test of integrity

Explain the type of general obligation bond : Generally, general obligation bonds are consider less risky than revenue bonds since the latter are project specific where as the former, depending on the type.

Determine break-even level of output for each of processes : A company is considering investing in one of the production processes identified below. Determine the break-even level of output for each of the processes.

Calculate the depreciation expense : Calculate the depreciation expense using the diminishing-balance method for 2018 and 2019

Describe what role did the vision statement play in success : Describe What role did the vision statement play in the success? What research was conducted by both CEO's on the other business before the merger?

Creating the tangible products or services : Scenario: You work as an analyst for a very successful venture capitalist. Recently, your boss has divested a number of businesses and she is eager.

Explain what happens in the formula : In the conference model cell B36, explain what happens in the formula

User Account

All Pages