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2 Required Information The foowing information applies to the questions displayed below This year Burchard Company sold 38.000 units of its only product for $16.60

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2 Required Information The foowing information applies to the questions displayed below This year Burchard Company sold 38.000 units of its only product for $16.60 per unit Manufacturing and belling the product required $123,000 of fixed manufacturing costs and $183,000 of fixed selling and adminigtrative costs. Its pec unit variable costs follow Part 1 of 2 0208 37 4.30 3.3e 8.43 0.23 Material Direct labor (paid on the basis of conpleted units) Variable overhead costs Variable selling and administrative costs Next year the company will use new material, which will reduce will not affect the number of units sold because the being considered. Under plan 1, the company will keep the last year. This plan will increase income because of the reduced costs from using thie new material Under company wil increase the selling price by 20% This 2. the total fixed costs and the vaiable costs per unit for overhead and for selling same material costs by 60% and direct labor costs by 4 % product quality or marketability, Management is considering an increase in the unit selling price to reduce factory's output is nearing its annual output capacity of 43,000 units. Two plans are selling price at the current level and sell the same valume plan will decrease unit sales volume by 10% under both plans 1 and and administrative costs will remain the Required: 1. Compute the break even point in dolar sales for both (a) plan 1 and (b) plan 2. (Round per unt answers" and "CM percentage enswer to 2 declmel pleces) retio Direct labor Total variable costs Next year the company will use new matenal, which will reduce material costs by 60% and direct labor costs by 40% and will not affect product quality or marketability. Management is considering an increase in the unit selling price to reduce the number of units sold because the factory's output is nearing its annual output capacity of 43,000 units. Two plans are being considered. Under plan 1 the company will keep the selling price at the current level and sell the same volume as last year. This plan will increase income because of the reduced costs from using the new material. Under plan 2, tpe company will ncrease the selling price by 20% This plan will decrease unit sales volurne by to. under both plans i and 2 the tocal fixed costs and the variable costs per unit for overhead and for selling and administrative osts will remain the same Part 1 of 2 20 Required plan 2 (Round "per unit answers" and " ratio" t Compute the breakeven point indollar sales for both (a) plan 1 and percentege enswer to 2 declmel places) Direct labor Varisble overhead costs Variable S&A cosths 0.00 margn rabo point in dolars Plan 2 point dolars

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