A security alarm manufacturer expects total annual fixed cost of 180,000,000. The security alarm has a variable cost of 2,700 with a selling price of 4,500.

i. Calculate how many devices should be sold to break-even.

ii. Calculate profit to earn by selling 120,000 alarms.

iii. The manufacturer has further noted that same plant (as it is under-utilized) can also be used to manufacture a component in a fire alarm and vehicle alarm. The plants maximum annual operating capacity is 40,000 hours. The selling price, variable cost, and demand data are shown in Table Q4-1. Prepare a production plan, if the manufacturer has already signed a contract for 15,000 security alarm components, and 40,000 Fire alarm components and vehicle alarm components.

Table 04-1: Product Manufacturing Information Security alarm Fire alarm Selling price (per circuit) 4,500.00 2,900.00 Variable cost (per circuit) 2.700.00 1,750.00 Requirement - Machine hours per unit 0.5 0.2 Maximum annual demand in units) 35.00) 50.000 Vehicle alarm 3.250.00 1.850.00 0.4 40,000