The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with...
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The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk-screened design and embellishments. A summary of the expected costs and revenues for Mohave's two options follows Rosa Decorated Umbrella Umbrella 22,000 units 22,000 units Estimated demand Estimated sales price Estimated manufacturing cost per unit $ 24.00 S34.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead S 14.50 3.50 2.50 5.00 $25.50 S 16.50 6.00 4.50 5.00 $ 32.00 S 10,000 Unit manufacturing cost Additional development cost
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