Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: Variable costs (per unit) ($) Process type Annualized fixed cost labor material energy Of plant & equip. Intermittent $1,000,000 24 26 20 Mass customization $1,190,000 30 18 12 Repetitive $1,385,000 28 15 11 Continuous $1,660,000 25 15 10 Determine the most economical ranges of units for each process types. The Maxistand will sell for $129 per unit. What is the minimumnumber of Maxistand Metters Cabinets, Inc. needs to sell in order to make a net profit (Rev – Fixed Cost – Total Variable Cost) of $1,165,000?
Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data:
Variable costs (per unit) ($)
Process type Annualized fixed cost labor material energy
Of plant & equip.
Intermittent $1,000,000 24 26 20
Mass customization $1,190,000 30 18 12
Repetitive $1,385,000 28 15 11
Continuous $1,660,000 25 15 10
- Determine the most economical ranges of units for each process types.
- The Maxistand will sell for $129 per unit. What is the minimumnumber of Maxistand Metters Cabinets, Inc. needs to sell in order to make a net profit (Rev – Fixed Cost – Total Variable Cost) of $1,165,000?
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