Calculate Total Product cost. (pencils)

1. Identify the number of units to be produced in one month.

2. Calculate the Variable costs and Fixed costs related to Product cost per unit.

3. Calculate the Total Product cost per unit.

4. Determine the Sales price of your product.

Present a Proforma Income Statement.

1. Determine the Sales price of your product.

2.Calculate the following for one month of sales:

a. Total Revenue

b. Cost of Goods Sold

c. Gross Profit

Analyze your Proforma Income Statement.

a. Is your company profitable?

b. How could you reduce product cost?

c. How could you reduce period costs?

d. How would your operations be affected by the reductions you are considering?