The Hi-Fi manufacturing company is currently evaluating two possible processes for the manufacture of a...
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Accounting
- The Hi-Fi manufacturing company is currently evaluating two possible processes for the manufacture of a toy, and makes available to you the following information.
|
| Process A (Sh.) | Process B (Sh.) |
| Variable cost per unit Sales price per unit Total fixed costs per year Anticipated sales (next 2 years in units) Capacity in units | 12 20 3,000,000 400,000 430,000 | 14 20 2,100,000 400,000 500,000 |
You are required to suggest:
- Which process should be chosen? Substantiate your answer.
- Would you change your answer as given above if you were informed that the capacities of the two processes are as follows; A 600,000 units and B 500,000 units. Why? Substantiate your answer
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You can see the logs in the Dashboard.