MARKERTING (LOOSE-LEAF)
MARKERTING (LOOSE-LEAF)
14th Edition
ISBN: 9781264117109
Author: Kerin
Publisher: MCG
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Chapter 13, Problem 5VC

a)

Summary Introduction

Case summary:

Company WG manufactures 4 categories of instruments such as batch custom, mass produced, one-of-a-kind, and mass customized. It is necessary to set different prices to different categories of instruments to sustain in the business. Person BA, who is the vice president of Company WG, is responsible for setting the price.

The recommended retail cost is $349. Person BA calculates Company WG variable and fixed costs to know the breakeven point and profit. Profits and breakeven points are calculated under different conditions to assess the effects of production facility.

Characters in case:

Company WG

Person BA

Introduction:

Fixed cost remains the same and it does not change with the capacity of production. The company does not change with the amount of goods or service produced. Examples of fixed cost include rent, salary, and insurance.

Variable cost does not remain the same and it directly varies with the capacity of production. In case of the variable cost, company increases or decreases with the volume of production. Examples of variable cost include the direct materials used for production purpose and direct labour.

To determine: The lower specific cost for fixed & variable costs.

b)

Summary Introduction

Case summary:

Company WG manufactures has 4 categories of instruments such as batch custom, mass produced, one-of-a-kind, and mass customized. It is necessary to set different prices to different categories of instruments to sustain in the business. Person BA, who is the vice president of Company WG, is responsible for setting the price.

The recommended retail cost is $349, Person BA calculates Company WG variable and fixed costs to know the breakeven point and profit. Profits and breakeven points are calculated under different conditions to assess the effects of production facility.

Characters in case:

Company WG

Person BA

Introduction:

Fixed cost remains the same and it does not change with the capacity of production. The company does not change with the amount of goods or service produced. Examples of fixed cost include rent, salary, and insurance.

Variable cost does not remain same and it directly varies with the capacity of production. In case of variable cost, company increases or decreases with the volume of production. Examples of variable cost include the direct materials used for production purpose and direct labour.

To determine: The additional specific cost for fixed & variable costs.

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