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

question 49

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 = $24,000 per year and variable costs = $10 per unit. If a price of $80 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:

Fertilization

The process by which male and female gametes unite, leading to the development of a new organism.

Uterus

A female reproductive organ in mammals, including humans, where a fertilized egg implants, and a fetus develops.

Human Papillomavirus

A group of viruses, often referred to as HPV, that can cause warts and are sometimes associated with the development of certain cancers.

Genital Herpes

A sexually transmitted infection caused by the herpes simplex virus, characterized by genital sores and pain.