70.2K

Verified Solution

Link Copied!

For nearly $20$ years, Specialized Coatings has provided painting and galvanizing services formanuffor manufactuThe $$company $$has $$not $$been $$able $$to $$increase $$its $$capacity $$fast enough, $$so $$Specialized $$Coatings $$has $$had $$to $$turn to $$work $$away $$because $$it $$cannot $$keep $$up $$with customer $$requests$.$rersacturers in its region. Manufacturers of various metal products have relied on the ququality andalityand quick turnaround time provided by Specialized Coatings and its $20$ skilled employees. Duringthe last year, as a result of a sharp upturn in the economy, the company$$s sales have increased by $30\%$ relative to the previous year. The company has not been able to increase its capacity fastenough, so Specialized Coatings has had to turn work away because it cannot keep up withcustomer requests.For nearly $20$ years, Specialized Coatings has provided painting and galvanizing services for manufacturers in its region.

Manufacturers of various metal products have relied on the quality and quick turnaround time provided by Specialized Coatings and

its $20$ skilled employees. During the last year, as a result of a sharp upturn in the economy, the company's sales have increased by $30\%$

relative to the previous year. The company has not been able to increase its capacity fast enough, so Specialized Coatings has had to

turn work away because it cannot keep up with customer requests.

Top management is considering the purchase of a sophisticated robotic painting booth. The booth would represent a considerable

move in the direction of automation versus manual labor. If Specialized Coatings purchases the booth, it would most likely lay off $15$ of

its skilled painters. To analyze the decision, the company compiled production information from the most recent year and then

prepared a parallel compilation assuming that the company would purchase the new equipment and lay off the workers. Those data

are shown below. As you can see, the company projects that during the last year it would have been far more profitable if it had used

the automated approach.

Top management is considering the purchase of a sophisticated robotic painting booth. The booth would represent a considerable move in the direction of automation versus manual labor. If Specialized Coatings purchases the booth, it would most likely lay off $15$ of its skilled painters. To analyze the decision, the company compiled production information from the most recent year and then prepared a parallel compilation assuming that the company would purchase the new equipment and lay off the workers. Those data are shown below. As you can see, the companyprojects that during the last year it would have been far more profi table if it had used the As $$you $$can $$see$,$the $$company projects $$that $$during $$the $$last $$year$,$it $$would $$have $$been far more profitable if it had used the automated approach. Compute the break$-$even point in sales dollars under each approach.

Answer & Explanation Solved by verified expert

See Answer