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A company runs eight hours per day and is considering bidding on a new product that will have a selling price of $1, 300 per part. the company has 175 fulltime employees. the average labor rate is $10.25 per hour. Accounting records for a similar company product indicated that the cost for the 21st unit was $190,000 and the cost for the 25^th unit was $172,000. the company estimates that it will take 2500 hours to produce the first unit of the new product. the optimum learning performance is estimated to take 160 working days. A UD intern has estimated the material cost at $450 per part. the machines to produce the part have a total average rental cost of $668,000 annually. Maintenance cost is approximately $675, 500 annually plus $150 per unit. Insurance and taxes are $98,000 annually.

How many units must the company produce to break even?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92275642

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