[sancha231]

A company want to start producing bird house. The bird house has to be produced at a minimum of 4,300 units the first year

Bird House
Components: Wood and plastic
Direct Materials:
 Wood: 0.80 ft. per unit of product; cost is $6.00 per foot
 Plastic: 0.50 lb. per unit of product; cost is $0.80 per pound
 Need: Wood 290ft
 Need: Plastic: 340 lbs.
= 360 houses to sell at $22 per unit


Direct labor requirements for the first month:
Bird House
 Fabrication 0.20 hr. at $15 per hour
 Assembly 0.30 hr. at $11 per hour

Below is the current financial information for the company. These numbers do not reflect the impact of the new product you plan to recommend.
 Revenue: $3,453,234
 Operating Expenses: $ 1,984,342
Net Income: $1,468,892

Determine by what percentage revenue is expected to increase (consider the price that will be paid per unit and how many units you plan to produce). Remember to meet the minimum for production and to take into consideration the factors below:
o Current operating expenses will increase by 15% in the first year of production of the new product
o Sales and advertising costs will increase by 10%
o Factory wages will increase by 15% for additional labor
o Power and light costs will increase by 10% for extra usage