1. Prepare a contribution margin income statement, showing the projected income for each product line, and for...
Question:
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1. Prepare a contribution margin income statement, showing the projected income for each product line, and for the company as a whole, for the first six months of 2005 based on the Forecasted Results of Operations presented on the previous page.
2. Determine the break-even number of cases for each product line and the total revenue necessary to break-even during the first six months of 2005 if the product mix is unchanged.
3. Determine the break-even number of cases (and sales revenue) if only one product line is sold during the first six months of 2005. Do this separately for both the Regular and Heavy-Duty lines.
4. If Agrigento received a one-time order for 50,000 units of Regular compound during the six-month period, what is the lowest price that it could accept without reducing its income? Assume that no other sales would be affected.
5. If a customer wanted to purchase $36,000 worth of product (either Regular or Heavy-Duty, the customer is indifferent), what combination of cases of each would maximize Agrigento?s profit?
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