Unit 3 Assignment Exercise 9-35; p 350

Unit 3 Assignment Exercise 9-35; p 350
Variable Costs per ice cream

Direct Labor $13.50
Direct Materials $14.50
Variable Overhead $6.00
Total Variable Cost $34.00
Fixed Costs
Manufacturing $82,500.00
Selling $42,000.00
Administrative $356,000.00
Total Fixed Cost $480,500.00
Selling Price Per Unit $65.00
Expected Sales(Units) 30,000

1. If the cost and sales price remain the same, what is the
project for the compng year?

2. What is the breakeven point in units for the coming year?

3. Jan has set the sales target for 35,000 ice cream makers which
she think she can achieve by an additional fixed selling expense
of $200,000 for advertising. All other cost remains as in
requirement 1. what will be the operating profit if the
additional $200,000 is spent on advertising and sales rise to
35,000 units?

4. What will be the new breakdown point if the additional
$200,000 is spent on advertising?

If the additional $200,000 is spent for advertising in the next
year, what is the required sales level in the units to equal the
current year’s income at 30,000 units?