Answer question below 250 words .
Scenario:
You are the new CEO of DualJet, a U.S. company that makes premium kitchen stoves for home use. You must decide whether to assemble the stoves in-house or to have a Mexican company do it. The fixed and variable costs for each option are as follows:
Assemble in House
Fixed Cost= $55,000
Variable Cost= $620
Contract with Mexican assembler
Fixed Cost =0
Variable Cost= $880
(**) Suppose DualJet’s premium stoves sell for $2,500. What is the break-even volume point for assembling the stoves in-house?
(*) At what volume level do the two capacity options have identical costs?
(**) Suppose the expected demand for stoves is 3,000. Which capacity option would you prefer, from a cost perspective?
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Scenario:
You are the new CEO of DualJet, a U. appeared first on assignment in 6hours.