Answer: Increase of $20,000
Explanation:
The cost of making a unit is:
= Direct material + Direct labor + Variable overhead + Fixed overhead
= 10 + 14 + 5 + 3
= $32
For 4,000 units that would be:
= 4,000 * 32
= $128,000
Cost of buying 4,000 units :
= Cost of buying + Fixed cost
= (4,000 * 30) + (3 / 2 * 4,000)
= $126,000
This cost is further reduced by the renting of the unused space:
= 126,000 - 18,000
= $108,000
Impact on profit:
= Cost of making - Cost of buying
= 128,000 - 108,000
= $20,000
Increase of $20,000
Answer:
<em>A. Big steel, a metal manufacturer that has negligible market share in a slow-growing industry</em>
Explanation:
Answer:
1,079 units
Explanation:
Fierce company forecast sales = 1150 units
Let this 1150 units be = 100%
Chester wanting to make a surplus of 10% means the total production will be = 110%
So, lets consider 1150 units as 100%
Then, 110% will be = (1150 units/100)*110 = 1265. So, Fierce fulfillment before Adjustment is 1,265 units
Fierce fulfillment after adjustment = 1,265 units - 186 units = 1,079 units
So, Fierce's Fulfillment after adjustment have to be 1,079 units in order to have a 10% reserve of units available for sale.
When a company services the broad market and has a low degree of product differentiation, it is most likely pursuing a cost-leadership strategy.
<h3>What is Cost Leadership?</h3>
Cost leadership is a term used when a company projects itself as the cheapest manufacturer or provider of a particular product or commodity in a competition. It is difficult to deploy the strategy because the management must constantly work on reducing cost at every level to remain competitive.
Cost leadership is a part of marketing strategy. Although, it is highly effective in gaining market share as well as drawing the customers' attention, it is difficult to deploy. The management team of the company has to constantly work towards reducing the cost of not just one product, but the entire range of products in the company's portfolio.
<h3>What Is Cost Leadership Strategy?</h3>
Cost leadership is a business-level strategy employed by companies who wish to gain a competitive advantage by being the lowest-cost producer of a service, production process, or commodity.
Therefore, we can conclude that the correct option is it is most likely pursuing a cost-leadership strategy.
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