Creative Ideas Company Has Decided To Introduce A New Product

Creative Ideas Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows.

Creative Ideas Company has decided to introduce a new product.

Don't use plagiarized sources. Get Your Custom Essay on
Creative Ideas Company Has Decided To Introduce A New Product
Just from $13/Page
Order Now

Creative Ideas’ market research department has recommended an introductory unit sales price of $32. The incremental selling expenses are estimated to be $502,000 annually plus $2 for each unit sold, regardless of manufacturing method.

Instructions
With the class divided into groups, answer the following.
(a) Calculate the estimated break-even point in annual unit sales of the new product if Creative Ideas Company uses the:
(1) Capital-intensive manufacturing method.
(2) Labor-intensive manufacturing method.
(b) Determine the annual unit sales volume at which Creative Ideas Company would be indifferent between the two manufacturing methods.
(c) Explain the circumstance under which Creative Ideas should employ each of the two manufacturing methods.
(CMAadapted)

NOTE:
We have worked on a similar assignment and our student scored better and met their deadline. All our tasks are done from scratch, well researched and 100% unique, so entrust us with your assignment and I guarantee you will like our services and even engage us for your future tasks. Click below button to submit your specifications and get order quote

Get started