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A. B. Multiframe Company has the following revenue and cost budgets for the two products it sells. The budgeted unit sales equal the current unit
A. B. Multiframe Company has the following revenue and cost budgets for the two products it sells. The budgeted unit sales equal the current unit demand, and total fixed overhead for the year is budgeted at $1,950,000. Assume that the company plans to maintain the same proportional mix. In numerical calculations, MultiFrame rounds to the nearest cent and unit. The total number of units MultiFrame needs to produce and sell to break even is: 354,545 units. 162,500 units. 300,000 units. 150,000 units. The cost management team is analyzing two alternative production processes for a new product that will sell for $120 per unit. The marketing team is projecting that 10,000 units will sell annually. The two production processes have different cost structures as shown below. - Process A: $55 per unit variable cost; Annual fixed costs $200,000 - Process B: $50 per unit variable cost: Annual fixed costs $275,000 The executive team has set a target income of $400,000 for this new product. Based on an analysis of costs, sales volume, and profit for each process, what course of action should the cost management team recommend? Reject both production processes. Neither process will achieve the target income. Accept Process A and reject Process B. Only Process A will achieve the target income. Accept Process B and reject Process A. Only Process B will achieve the target income. Accept either process. Both processes will achieve the target income
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