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Assignment One: Kim Inc. is considering three places for distribution its new product. The expected selling price per unit is $200; variable manufacturing costs are

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Assignment One: Kim Inc. is considering three places for distribution its new product. The expected selling price per unit is $200; variable manufacturing costs are $120 per unit, and fixed manufacturing costs are $9,000. In addition, the company faces the following cost structure Place # 1: to pay annual fixed marketing costs amount of $11,000 Place # 2: to pay annual fixed marketing costs $5,000 plus 5% commission (of selling price). Place # 3: to pay 10% commission with no fixed marketing cost. Required: 1- 2- compare these three alternatives using CVP analysis (Hint: calculate BEP for each) Which alternative is better? Why? Two: Amr Company has three branches. Data on each branch for year 2017 are as follows: Branch #1 | Branch #2 | | Branch #3 $30,000 Total Total Sales revenues $20,000 $50,000 Less: Variable Manufacturing Costs Fixed Manufacturing 5,000 Costs Variable Marketing 5,100 3,000 Costs Fixed Marketing 2,000 Costs Total Costs Net operating income (1,100) (loss) 100,000 44,000 16,000 12,000 33,000 0,100 6,000 9,000 25,000 10,000 2,000 1,000 25,000 3,000 21,100 47,000 93,100 3,000 5,000 6,900 Note: the company is considering dropping branch #1. If the company drops branch #1, total fixed manufacturing costs will decrease by 10%. Required: Should Amr Company drop branch #1. Show your supporting calculations

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