Metters Cabinets, Inc., needs to choose a production method for its new office s

Question

Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand To help accompilish this, the frm has gathered the following production cost dala Annualized Fixed Cost Variable Costs (per unit) (S) Process Tvpe of Plant & Equipment Labor Material Energy Mass Customization $1 Intermittent Repetitive Continuous $1,400,000 1,000,000 $1,625,000 $1,960,000 30 24 28 25 18 26 15 15 20 12 10 Metters Cabinets projects an annual demand of 24,000 units for the Maxistand. The selling price for the Maxistand is $120 per unt a) Based on the projected annual demand, the best alternative available is to use the b) The value of annual profit using this method is s(Enter your response as an integer) Y process

Explanation / Answer

Total cost for intermittent is the least so this method will be most favourable for current demand.

Annual Profit: 120*24000 - 2680000 = $200000

Fixed Cost Total
Variable Cost 24000 Total Cost Mass customization 1400000 30 18 12 60 1440000 2840000 Intermittent 1000000 24 26 20 70 1680000 2680000 Repetitive 1625000 28 15 12 55 1320000 2945000 Continous 1960000 25 15 10 50 1200000 3160000

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---