3. Andy Mendoza makes handcrafted dolls, which he sells at craft fairs. He is considering mass-producing the dolls to sell in stores. He estimates that the initial investment for plant and equipment will be $25,000, whereas labor, material, packaging, and shipping will be about P10 per doll. If the dolls are sold for P30 each, what sales volume is necessary for Andy to break even? ANSWER 6 6. Andy Mendoza in Problem 3 is concerned that the demand for his dolls will not exceed the break-even point. He believes he can reduce his initial investment by purchasing used sewing machines and fewer machines. This will reduce his initial investment from P25,000 to $17,000. However, it will also require his employees to work more slowly and perform more operations by hand, thus increasing variable cost from P10 to P14 per doll. Will these changes reduce his break-even point?

3. Andy Mendoza makes handcrafted dolls, which he sells at craft fairs. He is considering mass-producing the dolls to sell in stores. He estimates that the initial investment for plant and equipment will be $25,000, whereas labor, material, packaging, and shipping will be about P10 per doll. If the dolls are sold for P30 each, what sales volume is necessary for Andy to break even? ANSWER 6 6. Andy Mendoza in Problem 3 is concerned that the demand for his dolls will not exceed the break-even point. He believes he can reduce his initial investment by purchasing used sewing machines and fewer machines. This will reduce his initial investment from P25,000 to $17,000. However, it will also require his employees to work more slowly and perform more operations by hand, thus increasing variable cost from P10 to P14 per doll. Will these changes reduce his break-even point?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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