ItemsSelling Price Per UnitTotal Sales quantityDirect Labor CostDirect Material CostOther Variable expenseManagement SalariesUtilities (electricity,water, communications)Advertising Expense(80% Fixed, 20%Variable)Interest ExpenseDistributionExpense(80% Fixed,20% Variable)Selling and Commission(90% Fixed and 10%Variable)*Taxes (annual)Note: Total tax annually*UnitOMRunits or pcsOMROMROMROMROMROMROMROMROMROMRAmount3402,852,6008,39064,2101,158,2001,51032,99014,750140,8801,60042,48011,300 (i)(ii)(iii)(iv)The breakeven point for this situationContribution marginUsing a production range from zero to 10,000 units a month, develop the following cost-volume-profit graphical presentation, and explain their significance.(a) A breakeven chart(b) A profit-volume graphDiscuss possible strategies of the company to decrease breakeven point, Contributionmargin, and increase profitability without increasing the selling price per unit.

The Break-even point is the point where total revenue and costs are the same. To calculate the…

Answered: (i) (ii) (iii) (iv) The breakeven point…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Product-Profitability Analysis; Scarce Resources Creighton Corporation produces a varietyof consumer electronic products. Unit selling prices and costs for three models of one of its productlines are as follows:[LO 11-7]No Frills Standard Options SuperSelling price $40 $70 $86Direct materials 10 14 16Direct labor (@ $20/hour) 10 20 30Variable overhead 3 6 9Fixed overhead 3 6 6Variable overhead is charged to products on the basis of direct labor dollars; fixed overhead isallocated to products on the basis of machine hours.Required5. How can the optimum product mix be determined when there are only two products and one or moreconstraints?
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