Techno Corporation is currently manufacturing an item at variable costs of $4 per unit. Annual fixed costs of manufacturing this item are $142,000. The current selling price of the item is $10 per unit, and the annual sales volume is 35,000 units. a. Techno can substantially improve the item's quality by installing new equipment at additional annual fixed costs of $55,000. Variable costs per unit would increase by $2, but, as more of the better-quality product could be sold, the annual volume would increase to 50,000 units. Should Techno buy the new equipment and maintain the current price of the item? Why or why not? b) Alternatively, Techno could increase the selling price to $11 per unit. However, the annual sales volume would be limited to 45,000 units. Should Techno buy the new equipment and raise the price of the item? Why or why not? Yes or No Increase or Decrease $____ to $____ **enter as integer*
Techno Corporation is currently manufacturing an item at variable costs of $4 per unit. Annual fixed costs of manufacturing this item are $142,000. The current selling price of the item is $10 per unit, and the annual sales volume is 35,000 units. a. Techno can substantially improve the item's quality by installing new equipment at additional annual fixed costs of $55,000. Variable costs per unit would increase by $2, but, as more of the better-quality product could be sold, the annual volume would increase to 50,000 units. Should Techno buy the new equipment and maintain the current price of the item? Why or why not? b) Alternatively, Techno could increase the selling price to $11 per unit. However, the annual sales volume would be limited to 45,000 units. Should Techno buy the new equipment and raise the price of the item? Why or why not? Yes or No Increase or Decrease $____ to $____ **enter as integer*
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Techno Corporation is currently manufacturing an item at variable costs of $4 per unit. Annual fixed costs of manufacturing this item are $142,000. The current selling price of the item is $10 per unit, and the annual sales volume is 35,000 units.
a. Techno can substantially improve the item's quality by installing new equipment at additional annual fixed costs of $55,000. Variable costs per unit would increase by $2, but, as more of the better-quality product could be sold, the annual volume would increase to 50,000 units. Should Techno buy the new equipment and maintain the current price of the item? Why or why not?
b) Alternatively, Techno could increase the selling price to $11 per unit. However, the annual sales volume would be limited to 45,000 units. Should Techno buy the new equipment and raise the price of the item? Why or why not?
Yes or No
Increase or Decrease
$____ to $____ **enter as integer**
Transcribed Image Text:Techno Corporation is currently manufacturing an item at variable costs of $4 per unit. Annual fixed costs of manufacturing this item are $142,000. The current
selling price of the item is $10 per unit, and the annual sales volume is 35,000 units.
a. Techno can substantially improve the item's quality by installing new equipment at additional annual fixed costs of $55,000. Variable costs per unit would increase
by $2, but, as more of the better-quality product could be sold, the annual volume would increase to 50,000 units. Should Techno buy the new equipment and
maintain the current price of the item? Why or why not?
V, because the profit
V from $ to $ (Enter your responses as integers.)
b. Alternatively, Techno could increase the selling price to $11 per unit. However, the annual sales volume would be limited to 45,000 units. Should Techno buy the
new equipment and raise the price of the item? Why or why not?
because the profit
from S to $ (Enter your responses as integers.)
decreases
increases
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