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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
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Experience:  Post Graduate Diploma in Management (MBA)
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ACME Manufacturing, Inc, is considering reorganizing its plant

Customer Question

ACME Manufacturing, Inc, is considering reorganizing its plant and increasing advertising. The following estimates have been prepared:

Before the change After the change
Total annual sales $700,000 $900,000
Cost as percentage of sales:
Direct materials 10% 9%
Direct Labor 5% 4%
Support costs 9% 17%
A. What amount of annual change is projected for total support and manufacturing costs?

B. How will ACME's profit change with this reorganization? Should ACME go ahead with this plan?
Submitted: 7 years ago.
Category: Homework
Expert:  Linda_us replied 7 years ago.

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