A Product Is Currently Made in a Process-Focused Shop, Where

question 85

Essay

A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $40 per unit. The firm is considering a fundamental shift in process, to repetitive manufacture. The new process would have fixed costs of $120,000, and variable costs of $8. What is the crossover point for these processes (round to the nearest whole unit)? For what range of outputs is each process appropriate?

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Definitions:

Whistleblowers

Individuals who expose illegal, unethical, or improper conduct within an organization.

Ordinance Violation

The breach of local laws or regulations, typically involving penalties like fines or community service.

Felony

A felony is a serious criminal offense, typically involving violence, that is punishable by imprisonment for more than one year or by death.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 aimed at enhancing corporate governance and accountability, in response to financial scandals.