Atlas international Inc managers face a strategic decision: Should they (1) reorganize or (2) not...
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Atlas international Inc managers face a strategic decision: Should they (1) reorganize or (2) not reorganize manufacturing operations to reduce manufacturing costs? The reorganization will eliminate all manual handling of materials. Current manufacturing labor consists of 100 workers who operate machines and 20 who handle materials. The 20 materials-handling workers are on contracts that permit layoffs without additional payment. Each worker works 2.500 hours annually. Reorganization is predicted to cost 100,000 $ per year (mostly for new equipment leases). The reorganization will not affect the production output of 50,000 units, the selling price of 500 $. the direct material cost per unit of 100 $, manufacturing overhead of 1,500,000 $, or marketing costs of 4.000.000 S. Required: Please specify which costs are relevant costs and relevant revenues that help to get the decision. Consider the features of relevant information before answering this question. 7 A B IEEE % 93
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