Asked Feb 17, 2012, 07:11 PM
If anyone could help me with these questions it would be greatly appreciated. Also if you could provide a step by step of how you got the answers that would be great!
Engineering estimates indicate that the variable cost of manufacturing a new product will be $35 per unit. Based on market research, the selling price of the product is to be $72 per unit and there is an additional selling expense which is estimated to cost the company $10 per unit. The fixed costs applicable to this new product are budgeted at $4,800 per period and the initial production capacity is 430 units. Given this information determine the following:
a) The income at a sales volume of 70 units.
b) The profit or loss at a volume of 30% of capacity.
c) The net income assuming total sales of $23,400.
d) The number of units that must be sold to achieve a net income of at least $5,000.