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Category > Accounting Posted 28 Apr 2017 My Price 5.00

What is the break-even volume point for assembling in-house

You are the new CEO of Dual Jet, a company that makes expensive, premium kitchen stoves for home use. You

a. (**) Suppose Dual Jet’s premium stoves sell for $2500. What is the break-even volume point for assembling in-house?

b. (*) At what volume level do the two capacity options have identical costs?

c. (**) Suppose the expected demand for stoves is 3000. Which capacity option would you prefer from a cost perspective?

 

FIXED

COST

VARIABLE

COST

Assemble in-house

$55,000

$620

Contract with Mexican assembler

$0

$880

Answers

Alpha Geek
(8)
Status NEW Posted 28 Apr 2017 04:04 PM My Price 5.00

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file 1493398130-727719_1_636289044090309471_capacity-options.xlsx preview (185 words )
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