Limited Resources Problem
Hours: Labour Hours per Unit x Demand in Units
Profit: Units Produced x CMU
Keep or Replace
Sales
- COGS
= Gross Profit
- Selling Expenses
- Admin Expenses
+ SV
- Purchase Price
- Freight
- Installation
= OI
BASE STATEMENTS ON USEFUL LIFE OF THE MACHINE
Eliminating Unprofitable Segment
CVP with unprofitable segment
CVP without unprofitable segment