George Fine, owner of Fine Manufacturing, is consideringthe introduction of a new product line. George has consideredfactors such as costs of raw materials, new equipment, andrequirements of a new production process. He estimates that thevariable costs of each unit produced would be $8 and fi xed costswould be $70,000.(a) If the selling price is set at $20 each, how many unitshave to be produced and sold for Fine Manufacturingto break even? Use both graphical and algebraicapproaches.(b) If the selling price of the product is set at $18 per unit,Fine Manufacturing expects to sell 15,000 units. Whatwould be the total contribution to profi t from this productat this price?(c) Fine Manufacturing estimates that if it off ers the productat the original target price of $20 per unit, the companywill sell about 12,000 units. Which pricing strategy—$18per unit or $20 per unit—will yield a higher contributionto profi t?(d) Identify additional factors that George Fine shouldconsider in deciding whether to produce and sell the newproduct
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
George Fine, owner of Fine Manufacturing, is considering
the introduction of a new product line. George has considered
factors such as costs of raw materials, new equipment, and
requirements of a new production process. He estimates that the
variable costs of each unit produced would be $8 and fi xed costs
would be $70,000.
(a) If the selling price is set at $20 each, how many units
have to be produced and sold for Fine Manufacturing
to break even? Use both graphical and algebraic
approaches.
(b) If the selling price of the product is set at $18 per unit,
Fine Manufacturing expects to sell 15,000 units. What
would be the total contribution to profi t from this product
at this price?
(c) Fine Manufacturing estimates that if it off ers the product
at the original target price of $20 per unit, the company
will sell about 12,000 units. Which pricing strategy—$18
per unit or $20 per unit—will yield a higher contribution
to profi t?
(d) Identify additional factors that George Fine should
consider in deciding whether to produce and sell the new
product
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