A Company Has 33,000 Units of Its Sole Product That

question 67

Essay

A company has 33,000 units of its sole product that it produced last year at a cost of $71 each.This year's model is superior to last year's and the 33,000 units cannot be sold for their regular selling price of $127 each.The company has two alternatives for these items: (1)they can be sold to a wholesaler for $45 each,or (2)they can be reworked at a total cost of $700,000 and then sold for $53 each.The company has enough idle capacity to rework these items without affecting any new production.Which choice would increase the company's profits the most?

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Definitions:

Neurotic Needs

Psychological needs that are considered unrealistic or disproportionate, often leading to anxiety and other mental health issues.

Adult Behavior

Patterns of conduct or actions displayed by individuals who have reached full physical and mental maturity.

Horney

A psychoanalytic theorist (Karen Horney) known for her theories on neurotic behavior, personality, and the concept of basic anxiety.

Interpersonal Conflicts

A situation where individuals or groups have incompatible goals, attitudes, emotions, or behaviors, leading to disagreement or disputes.