Project #20884 - decision making

3. Write a paperthat is at least 750 words (papers that are less than 750 words, will receive a reduction in points) in which you respond to the Broadening Your Perspective 18-1 activity titled "Decision Making Across the Organization" in Ch. 18 of Accounting. U must write a paper based on the math figures.

 

 

 

 

 

 

 

DECISION MAKING ACROSS THE ORGANIZATION

 

 

 

 

 

 

 

BYP18-1 Martinez Company has decided to introduce a new product. The new product can be

 

 

 

 

 

 

 

manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing

 

 

 

 

 

 

 

method will not affect the quality of the product. The estimated manufacturing costs by the

 

 

 

 

 

 

 

two methods are as follows.

 

 

 

 

 

 

 

Capital-   Labor-

 

 

 

 

 

 

 

Intensive  

 

 

 

 

 

 

 

Direct materials  $5 per unit   $5.50 per unit

 

 

 

 

 

 

 

Direct labor   $6 per unit   $8.00 per unit

 

 

 

 

 

 

 

Variable overhead   $3 per unit     $4.50 per unit

 

 

 

 

 

 

 

Fixed manufacturing costs   $2,508,000   $1,538,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Martinez’s market research department has recommended an introductory unit sales price of

 

 

 

 

 

 

 

$30. The incremental selling expenses are estimated to be $502,000 annually plus $2 for each unit

 

 

 

 

 

 

 

sold, regardless of manufacturing method.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Instructions

 

 

 

 

 

 

 

With the class divided into groups, answer the following.

 

 

 

 

 

 

 

(a) Calculate the estimated break-even point in annual unit sales of the new product if Martinez

 

 

 

 

 

 

 

Company uses the:

 

 

 

 

 

 

 

(1) Capital-intensive manufacturing method.

 

 

 

 

 

 

 

(2) Labor-intensive manufacturing method.

 

 

 

 

 

 

 

(b) Determine the annual unit sales volume at which Martinez Company would be indifferent between the two manufacturing methods.

 

 

 

 

 

 

 

(c) Explain the circumstance under which Martinez should employ each of the two manufacturing methods.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Text: Kotler, P., & Keller, K. L. (2012). Marketing management (14th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

 

 

 

 

 

 

 

Newsom, D., Turk, J. V., & Kruckeberg, D. (2013). This is PR: The realities of public relations (11th ed.). Boston, MA: Wadsworth, Cengage Learning.

 

 

 

 

 

 

 

 

Subject Business
Due By (Pacific Time) 01/15/2014 12:00 am
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy