QUESTION 2 2 points Saved Herb\" Phillipson\'s wants to enter the market quickly
ID: 354268 • Letter: Q
Question
QUESTION 2 2 points Saved Herb" Phillipson's wants to enter the market quickly this year with a focus on kayaks. Competition is heating up as the weather gets warmer and they have three options: 1 Refurbish old kayaks at a cost of $800 2) Make major modifications to existing stock at a cost of $1,100, or 3) Purchase new kayaks at a net cost of $1,800. if "Herb chooses to refurbish the equipment, materials and abor will be 1.10 per kayak he chooses to make mo cations, mater as an abor wi be er vak. eu s e equipment, variable costs are estimated to be $0.40 per kayak. Which alternative (Plan A, B, or C) should "Herb* choose if he thinks he can sell more than 3,000 kayaks? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) Total cost of refurbishing old kayaks- $800+(S1.10 x 5000)-$6300 Total cost of major modifications to existing stock $1100+(S0.70 x 5000) $4600 Total cost of purchase new Kayaks S1800(S0.40 x 5000) -$3800 I believe that Herb should choose to purchase new kayaks at a new cost of $1,800 because it is the most cost efficient Path: p span span Words:59Explanation / Answer
Yes, question 3 is correct because the total cost of all three factors are justified and calculated as per the requirement in the problem and based on that that Plan B is appropriate to be selected.