Please use the data in ex 3 to solve 3.1 EXERCISE 3The administrative director of Beta Spa, has given to the general director the following table with three products'costs of the company:Total costsDirect materials cost (€) 4.500€Direct labor cost (€)Specific fixed costs (€)General fixed costs (€)Total5.000 €3.500 €2.613 €15.613 €S.000 €6.000 €4.000 €4.645 €22.645 €3.000 €2.000 €1.500€1.742 €S.242 €Total15.500€13.000 €9.000 €9.000€46.500 €Units produced for each one are:Units150020001000Specific fixed costs are avoidable for the interruption of the referred product's production. Direct materials costand direct labor cost are variable. General fixed costs are allocated on the total of direct materials cost (15.500 €).All data are about 2018. Ex 3.1Use the previous text.The general director must decide:2000 units of product B is sold at the price of 24€ If the principle competitor cuts the price to 20€, Beta could havetwo alternatives:a. Take price unchanged, sell only 1500 units of B;b. Cur the price to 20€ and continue to sell 2000 units of B.What decision is the most convenient for the company?

The above problem is related to cost volume profit ananlysis.…

Answered: adm. | bartleby

Business

Accounting

adm.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter27: Lean Principles, Lean Accounting, And Activity Analysis

Section: Chapter Questions

Problem 27.20EX

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