Coffee Mug: How is It Manufactured?
Instructions
Using your favorite search engine, choose a product that you are interested in learning more about, including how the product is manufactured. After you have located information about the product, answer the following questions about it.
What is a description of the product, and what company makes it?
What is the process used to manufacture the product? Name the raw materials and indirect materials used in its manufacturing.
Who would be considered direct and indirect labor in the making of this product, and why?
Using the cost-plus pricing approach, what target selling price would you set for the product? Explain why you chose this price.
Assume you are the owner of the company that produces the product. You have been offered the option to outsource the product’s component parts instead of making them. What cost factors would need to be considered? Does it make more financial sense to outsource these parts? Explain with examples/assumptions.
Assume the product was being made on an old piece of machinery that is slowing down production and causing delayed completion times. You have been given the option to either buy a new replacement piece of machinery or have this current machine reworked/repaired. Which option would you chose? What factors would be considered? State all assumptions and be sure to describe how incremental analysis would be used to make this decision.
Your project should consist of at least two pages, not counting a title page (if included) or references page. You must use at least two references, one of which can be your textbook. Adhere to APA Style when creating citations and references for this assignment. APA formatting, however, is not necessary.
Unit IV Project
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Unit IV Project
The company that manufactures the item is named Morning coffee mug, and the product is a coffee mug. The following steps are taken in the product’s production process. First, the business makes a mold of the mug. A molten ceramic is then poured into the mold. The business removes the cup from the mold when the ceramic has cooled and solidified and then paints it. The cup is then given a handle and baked in a kiln. Ceramics, clay, and paint are the primary raw materials utilized in the product’s creation.
The mold and the kiln are examples of indirect materials. The person who is painting the mug and the person who is pouring the ceramic into the mold are the two people who are performing the direct labor for this project. The person responsible for creating the mold and the individual operating the kiln are examples of indirect labor. Direct labor refers to the work done by employees directly involved in producing a given good or service. Indirect labor refers to work performed on a product during manufacturing but is not directly involved in producing that product (Katana, 2022). Nevertheless, this type of work is essential to the manufacturing procedure.
The production cost of each mug is $15, which is equal to the cost of the raw materials, the cost of indirect materials, and the cost of direct labor. Cost-plus pricing is the most prevalent pricing method used by businesses. This technique involves setting a significant profit margin on the production cost. In this case, the profit margin will be 40%; therefore, the item will retail at...