2-61 CVP in a Modern Manufacturing Environment A division of Hewlett-Packard Company changed its production operations from one where a large labor force assembled electronic components to an automated production facility dominated by computer-controlled robots. The change was necessary because of fierce competitive pressures.
Improvements in quality, reliability, and flexibility of production schedules were necessary just to match the competition. As a result of the change, variable costs fell and fixed costs increased, as shown in the following assumed budgets:
Old Production Operation New Production Operation
? Unit variable cost Material $ .88 $ .88 ? Labor 1.22 .22 ? Total per unit $ 2.10 $ 1.10 ? Monthly fixed costs ? Rent and depreciation $450,000 $ 875,000 ? Supervisory labor 80,000 175,000 ? Other 50,000 90,000 ? Total per month $580,000 $1,140,000 ? Expected volume is 600,000 units per month, with each unit selling for $3.10. Capacity is 800,000 units.
1. Compute the budgeted profit at the expected volume of 600,000 units under both the old and the new production environments. 2. Compute the budgeted break-even point under both the old and the new production environments. 3. Discuss the effect on profits if volume falls to 500,000 units under both the old and the new production environments. 4. Discuss the effect on profits if volume increases to 700,000 units under both the old and the new production environments. 5. Comment on the riskiness of the new operation versus the old operation.
“WE’VE HAD A GOOD SUCCESS RATE ON THIS ASSIGNMENT. PLACE THIS ORDER OR A SIMILAR ORDER WITH HOMEWORK AIDER AND GET AN AMAZING DISCOUNT”
The post 2-61 CVP in a Modern Manufacturing Environment — A division of Hewlett-Packard Company appeared first on Homeworkaider.
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but you proved you are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 11***| Rating: ⭐⭐⭐⭐⭐
"This company is the best there is. They saved me so many times, I cannot even keep count. Now I recommend it to all my friends, and none of them have complained about it. The writers here are excellent."
"Order a custom Paper on Similar Assignment at essayfount.com! No Plagiarism! Enjoy 20% Discount!"
