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A manafacturer has developed a new lawnmower. The lawnmower, called CutX, will have a strong 8-horse power cngibe, will cut grass and be able to
A manafacturer has developed a new lawnmower. The lawnmower, called CutX, will have a strong 8-horse power cngibe, will cut grass and be able to sow grass seeds as well if needed. CutX will be introdaced using a mass adverising campaign. Management has decided to spend $2,500,000 oo advertiving CutX in the first year. Other fixed costs (overhead) are projected to be \$1,500,000 per year. The unit variabie costs to produce one lawamower include $200 for materials and 5100 for direct labor. The Manufacturer' s selling price to the wholesaler is set at 5500 per lawnmower. The wholesaler wishes to achicve a profit margin of 25% based on his selling price to the retailer. And the retailet wisbes to achieve a profit margin of 30% based on hir own selling price to the fital consatnet. Given the aforementioned information, answer the questicas below. To avoid losing any points, you must show all workings, line by line, how you arrived at your answers, as well as all formulas you used in your calculation, (a). What is the break-even point unit volume is the first year for the Manufacturer? ( 5 poists) (b). What is the net profit for the Prodocer if 30,000 units are sold 75 points) (c). How many units necd to be seld for the Manufaciurer to achieve a prefit of 53,000 ,000? (5 pointe) (d). Calculate the price that the wholesaler will charge the retailer to achieve his set profit margin. Give your answer to two places of decimal. (5 points) (c). Calculate the priee that the retailer will charge the final consumer to achieve his set profit margin. Give your answer to two places of decimal. (5 points)
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