After the original island blew up into a black hole and transformed into a new island, a new store, Epic Inc, was opened in Retail Row in October 2019. Epic manufactures and sells products to help prepare for the upcoming storm and to defend oneself from enemies while escaping said storm. Epic started operations by selling three products: Med Kits, pump shotgun, and SCAR Anault Rifle. In October 2019, the following were the numbers pertaining to the sales and costs of the three products: Med Kits SCAR Pump Shotgun 350 500 200 $60,000 Sales (Units) Sales ($$$) Variable Costs ($$$) Fixed Costs ($$$): $30,000 $15,000 $8,500 $35,000 $17,500 $32,000 1) What is the break-even point for Epic, assuming the sales mix ratio does not change? Express in terms of number of med kits, pump shotguns, and SCARs that Epic would have to sell (Round up to the nearest whole number)? 2) What is the margin of safety in number of med kits for October? What is the margin of safety in dollars for the pump shotgun? What is the margin of safety in percentage for the SCAR? 3) What is the degree of operating leverage for Epic in the month of October? If Epic wants to increase total sales (across all three products) by 15%, how much would profits increase by? 4) In November, Epic is considering introducting a new item, the rocket launcher, that will cost $110 in variable costs and will be priced at $200. In order to help support the manufacturing of rocket launchers, Epic will incur an additional $400 in fixed costs. What recommendations would you make to Epic regarding the current sales mix and where the rocket launchers would fit in? Assume price and variable costs of the original three items remain the same in November. After the original island blew up into a black hole and transformed into a new island, a new store, Epic Inc, was opened in Retail Row in October 2019. Epic manufactures and sells products to help prepare for the upcoming storm and to defend oneself from enemies while escaping said storm. Epic started operations by selling three products: Med Kits, pump shotgun, and SCAR Anault Rifle. In October 2019, the following were the numbers pertaining to the sales and costs of the three products: Med Kits SCAR Pump Shotgun 350 500 200 $60,000 Sales (Units) Sales ($$$) Variable Costs ($$$) Fixed Costs ($$$): $30,000 $15,000 $8,500 $35,000 $17,500 $32,000 1) What is the break-even point for Epic, assuming the sales mix ratio does not change? Express in terms of number of med kits, pump shotguns, and SCARs that Epic would have to sell (Round up to the nearest whole number)? 2) What is the margin of safety in number of med kits for October? What is the margin of safety in dollars for the pump shotgun? What is the margin of safety in percentage for the SCAR? 3) What is the degree of operating leverage for Epic in the month of October? If Epic wants to increase total sales (across all three products) by 15%, how much would profits increase by? 4) In November, Epic is considering introducting a new item, the rocket launcher, that will cost $110 in variable costs and will be priced at $200. In order to help support the manufacturing of rocket launchers, Epic will incur an additional $400 in fixed costs. What recommendations would you make to Epic regarding the current sales mix and where the rocket launchers would fit in? Assume price and variable costs of the original three items remain the same in November
