(b) The Jupiter Australasia Strategic Management Committee has developed plans to have the factory completely...
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Accounting
(b) The Jupiter Australasia Strategic Management Committee has developed plans to have the factory completely overhauled in the next year (2021) which will double the capacity of the factory. The cost of the upgrade will be incurred as an additional $4 million Fixed Overhead manufacturing cost per annum. Using the flexibility of the excel model developed in part (i) calculate the impact on sales and gross profit if the option of upgrading the manufacturing facility is exercised and the practical production capacity of the factory is increased by 100% and an extra manufacturing cost of $2 million is incurred each year from 2022. (Submit results as a separate worksheet)
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