Green Office Company is considering options for manufacture for a desk. There is a machine available which the company could rent and which could be used to carry out some processes and an alternative to completely manual methods. The expected selling price per desk is expected to be £150. At this price, it is expected that the company will sell 500 desk per year. Each desk require materials that cost £40. Without the machine, the labour cost of each desk is expected to be £90, and the fixed costs related to the manufacture and sale of this product are expected to be £5,000. If the machine is rented, the labour cost is expected to increase to £15,000. a. Based on the case study information provided, please carry out a break-even analysis for both options facing the company (lease or buy), and calculate the following : • The contribution per desk for each option? • The break-even point (BEP) for desk per year? • The margin of safety? • The expected profit per year? b. Which decision would you recommend, and discuss 4 ways in which this type of analysis could be used in supporting the development of the company’s business plan. GUIDE 1. This request requires a first-rate analysis 2. This report should be handled by writer # 202249 3. Use, at least, 5 references from relevant textbooks, peer reviewed journals, webpages and online materials to enrich your analysis (References from Investopedia, Wikipedia not allowed). Where feasible, please include the reference: Barrow, C., Barrow, P. & Brown, and R. (2018) The Business Plan Workshop: A Step-By-Step Guide to Creating and Developing a successful Business, 10th edition, Kogan Page, London. 4. Words in “quotes” should not be more than 2% of the total word count for this essay 5. Emphasis should focus more on critical analysis to energize your discussion 6. Give at least, 2 organizational examples to assess the viability or otherwise of the business idea.
