math 101

Topics: Costs, Cost, Variable cost Pages: 3 (859 words) Published: April 6, 2014


Cost Scenario
University of Phoenix
Dillian Rivera Alvarez
ECO/561PR ECONOMICS-PUERTO RICO
March 25, 2014
Dr. Jose Toral Munoz

Cost Scenario
The cost scenario summary there is a big challenge on whether to purchase and obtain more units of cell phones. This decision will imply for San Juan cell phone more sales and this will produce more cost benefit in term of profit. This decision has to be made based on opportunity cost and cost concepts and an analysis of contribution. Maria is the business developer for San Juan Cell Phones. Maria has a big challenge as her meeting with the production manager Lisa Norman approaches, where Maria has to based her decision on what she has to proceed with the business development. Lisa, want’s to cave in an opportunity to operate the factory at full capacity and at a full total factory total productivity. They have to take into consideration the alternatives that will continue the factory in total profitability. San Juan Cell Phones has two production lines the Alpha and Beta model line that they run at the factory. These models have different costs per unit, variable cost per unit, fixed overhead and profits. Maria has secured an order of 100,000 phones. The Alpha model is an identical product that the San Juan Cell phones that the Big Box. Big Box will not pay not pay for over $15.00 for each cell phone based on the $20.00 per unit that makes Maria reconsider or analyze more profoundly her decision. The Beta Model in the unit profitability report shows a higher range in the price per unit, variable cost per unit, fixed overhead and profit. To make a managerial decision Maria has to evaluate the fixed costs and the variable costs, this will allow to proceed with a safe and useful decision. Maria has to evaluate certain criteria for San Juan Cell Phone such as the how the product sales , the cost of goods sold , variable operating and marketing expenses for the Alpha and Beta models....


References: A life-cycle cost scenario. (1999). Building Operating Management, 46(9), 1. Retrieved from http://search.proquest.com/docview/203426220?accountid=458
Hospital board mulling over hospital cost scenarios. (2008, Feb 06). Lakes District News. Retrieved from http://search.proquest.com/docview/374440121?accountid=458
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