Overland Automotive Company is considering on manufacturing a new brand of car.Given the current product and process designs,the cost data are:
The company expects the selling price to be $20,000 and has set a target profit of $5,000.
A supplier told Overland that it could purchase a couple of similar components under a different brand name at a lower price.This would result in cost savings of $2,000 per car.Furthermore,the company found that it could redesign its manufacturing process to cut down on both inspection labor and worker labor,which would result in cost savings of $1,000 per car.

Question

Overland Automotive Company is considering on manufacturing a new brand of car.Given the current product and process designs,the cost data are:
  The company expects the selling price to be $20,000 and has set a target profit of $5,000.
A supplier told Overland that it could purchase a couple of similar components under a different brand name at a lower price.This would result in cost savings of $2,000 per car.Furthermore,the company found that it could redesign its manufacturing process to cut down on both inspection labor and worker labor,which would result in cost savings of $1,000 per car.

Quizplus · Accepted Answer

The Answer of Overland Automotive Company is considering on manufacturing a new brand of car.Given the current product and process designs,the cost data are:
  The company expects the selling price to be $20,000 and has set a target profit of $5,000.
A supplier told Overland that it could purchase a couple of similar components under a different brand name at a lower price.This would result in cost savings of $2,000 per car.Furthermore,the company found that it could redesign its manufacturing process to cut down on both inspection labor and worker labor,which would result in cost savings of $1,000 per car.

Overland Automotive Company Is Considering on Manufacturing a New Brand