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According to revenue and cost information below High-End SetEconomical Set Sales price$3,500per unit$1,000per unit Labor$875per unit$250per unit Materials$1400per unit$300per unit Direct fixed costs$25,000per month$16,500per month

According to revenue and cost information below

High-End SetEconomical Set

Sales price$3,500per unit$1,000per unit

Labor$875per unit$250per unit

Materials$1400per unit$300per unit

Direct fixed costs$25,000per month$16,500per month

Allocated fixed costs$85,000per month$85,000per month

Could you please determine :

  1. Contribution Margins for each product line
  2. Break-even quantities for each product line
  3. Break-even quantities to earn $500,000 per year margin on the high-end line (at the current sales price)
  4. Break-even quantities to earn $300,000 per year margin on the economical line (at the current sales pric

Also,considering the purchase of machinery and equipment on a 5-year timeline:

Initial cash outlay is $150,000, no residual value.

Sales price is expected to be $2,250 per unit, with $595 per unit in labor expense and $795 per unit in materials.

Direct fixed costs are estimated to run $20,750 per month.

Cost of capital is 8%, and the required rate of return is 10%.

They will incur all operational costs in Year 1, though sales are expected to be 55% of break-even.

Break-even (considering only direct fixed costs) is expected to occur in Year 2.

Variable costs will increase 2% each year, starting in Year 3.

Sales are estimated to grow by 10%, 15%, and 20% for years 3 - 5.

Could you please calculate:

1.The product's contribution margin

2.Break-even quantity

3.NPV

4I.RR

thank you

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