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

question 165

Essay

A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $14,000 per year and variable cost = $10 per unit. If a price of $120 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

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Definitions:

Phonemes

The tiniest sound elements in a language that can differentiate one word from another.

Morphemes

The smallest grammatical units in a language, capable of conveying meaning, such as root words, prefixes, and suffixes.

Semantics

The branch of linguistics and logic concerned with meaning, including the relationships between words and phrases and what they represent in reality, and the rules governing these relationships.

Comprehensives

Broad educational schools in the UK that do not select students based on academic achievement or aptitude, aiming to provide a comprehensive education for all.