projected cost information for a new product to be introduced by melton manufacturin 4373028

Projected cost information for a new product to be introduced by Melton Manufacturing is as follows: Expected variable unit costs: $ Direct materials …………………………….. 11.00 Direct labour ……………………………….. 5.60 Selling expenses ……………………………. 2.00 Expected annual fixed costs: $ Rent of building …………………………….. 28 000 Manager’s salary…………………………….. 60 000 Maintenance contract ……………………….. 15 500 Administrative expenses ……………………. 20 500 The product is to be sold for $40.00 per unit. a) Compute the number of units that must be sold to breakeven. b) Compute the number of units that must be sold if administrative expenses rise to $35 000, selling expenses fall by 50c a unit and a target profit of $120 000 is required. c) Calculate the profit that would be earned if 8000 units of the new product were sold. Assume that the costs remain the same as in the original estimates. View Solution:
Projected cost information for a new product to be introduced

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