Candice Company has decided to introduce a new product that can be manufactured by either of two methods. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs of the two methods are as follows: Candice’s market research department has recommended an introductory unit sales price of $ 30. The incremental selling expenses are estimated to be $ 500,000 annually plus $ 2 for each unit sold, regardless of manufacturing method. Required: a. Calculate the estimated break- even point in annual unit sales of the new product if Candice Co. uses (i) Manufacturing method A. (ii) Manufacturing method B. b. Which production technology should the firm use andwhy?
Lion Essays is a licensed Academic Writing Service created to offer academic help to students from all parts of the world. We strive to be the best at what we do by combining convenient academic help with affordable pricing to allow all students to subscribe to our outstanding services.