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ACC 561 Decision Making Process

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ACC 561 Decision Making Process;Write a paper of no more than 750 words in which you respond to the Broadening Your Perspective 18-1 activity titled "Decision Making Across the Organization" in Ch. 18 of Accounting.;Martinez Company has decided to introduce a new product. The new product can b 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;Capital Labor;Intensive Intensive;Direct materials $5 per unit $5.50 per unit;Direct labor $6 per unit $8.00 per unit;Variable overhead $ 3 per unit $ 4.50 per unit;Fixed manufacturing costs $ 2,508,000 $ 1,538,000;Martinez's market research department has recommended an introductory unit sales price of $ 30. The incremental selling expenses are estimated to be $502,000 annually plus $2 for each unit sold regardless of manufaturing method.;a. Calculate the estimated break-even point in annual unit sales of the new product if Martinez company uses the;1. Capital - intensive manufacuring method;2. Labor - intensive manufacturting method;b. Determine the annual unit sales volume at which Martinez Company would be indifferent between the two manufacturing methods.;c. Explain the circumstance under which Martinez should employ each of the two manufacturing methods.

 

Paper#78162 | Written in 18-Jul-2015

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