Should audiocables buy the new equipment

Assignment Help Operation Management

Reference no: EM13231351

Audiocables, INC. is currently manufacturing an adapter that has a variable cost of $.50 per unit and a selling price of $1.00 per unit. Fixed cost are $14,000. Current sales volume is 30,000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $6,000. Variable cost would increase to $.60, but sales volume should jump to 50,000 units due ti a higher-quality product. Should audiocables buy the new equipment?

Reference no: EM13231351

Questions Cloud

What is the pressure of gas in container when heated : A container of gas at 760 mmHg and 20 degrees C is heated to 40 degrees C. What is the new pressure in mmHg?

Determine whether ability or motivation is more important : Determine whether ability or motivation is more important in selecting the right person for the right job. Explain your rationale.

Find net present value and internal rate of return : Calculate net present value (NPV), internal rate of return (IRR), and payback for the investment opportunity What information will you and your staff need to analyze this investment opportunity - how will you go about making the decision?

What is total number of workers that will be added to city a : Newton exports all their products outside the city and Garfield only sells their products within the city. Newton experiences growth, so it hires 100 more workers, all of whom come to reside in city A. Because of this, Garfield - at the first stag..

Should audiocables buy the new equipment : Variable cost would increase to $.60, but sales volume should jump to 50,000 units due ti a higher-quality product. Should audiocables buy the new equipment?

What type information is carried by data bus and address bus : What type of information is carried by the Data Bus? The Address Bus?

Which of the families in the city will buy their shirts : Jim enters the town and makes a factory, which is employed by the locals. Every worker in the factory works on one machine and is able to produce 6 shirts per hour. The cost of running the machine is half a loaf of bread per hour, the cost to empl..

Calculate the profit of the each locations : If expected sales at A, B, and C are 20,500 per month, 22,800 per month, and 23,400 per month, respectively, calculate the profit of the each locations?

What is the volume the gas occupy if the temperature is low : A gas at 30 degrees C and 600 mmHg occupies a volume of 412 cm^3. What is the volume in cm^3 that the gas will occupy if the temperature is lowered to -30 degrees C at the same pressure

User Account

All Pages