Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) HINT:Use the hi-low method from chapter 6. Cost of goods sold Shipping Salaries & commission 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 86,500 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) Break-even sales Annual profit (86,500 units) per unit per unit per unit units 3. Calculate the change in profit if the selling price were reduced by $13.00 each and annual sales were to increase by 8,400 units. 4. Determine the change in profit if the company were to increase advertising by $117,000 and if this were to increase sales by 8,400 units.
Required: 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) HINT:Use the hi-low method from chapter 6. Cost of goods sold Shipping Salaries & commission 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 86,500 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) Break-even sales Annual profit (86,500 units) per unit per unit per unit units 3. Calculate the change in profit if the selling price were reduced by $13.00 each and annual sales were to increase by 8,400 units. 4. Determine the change in profit if the company were to increase advertising by $117,000 and if this were to increase sales by 8,400 units.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 4PB: West Island distributes a single product. The companys sales and expenses for the month of June are...
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