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CHILD'S PLAY COMPANY ( A ) Child's Play Company makes a plastic rattle for toddlers. The rattle is generally marketed through exclusive retailers located in
CHILD'S PLAY COMPANY A Child's Play Company makes a plastic rattle for toddlers. The rattle is generally marketed through exclusive retailers located in upscale shopping malls. The company used retailers. In late Diana Suares, the president of the company, was considering alternative marketing plans presented to her by Bill Dings, the marketing manager. Based on sales from January through October Diana expected that sales would amount to units at $ per unit. Diana Suares also had with her some cost data for supplied by the CFO, Don Capp. Don expects that these costs are reliable estimates for a volume up to units. Beyond units, the company would have to rent additional machines with a capacity of units each at an annual cost of $ per machine in The data are presented in Exhibit A Total fixed manufacturing and selling and administrative costs are each expected to increase in by percent because of inflation. Variable costs per unit and the selling price would stay the same as in
Exhibit A Cost Data Manufacturing costs for rattles based on production volume of units
Direct material $ per unit
Direct labor $ per hour Each worker can make units in an hour Packaging $ per unit
Power, supplies, indirect labor, and other variable production costs $ per unit Supervisory salaries, equipment rental, and miscellaneous production costs $ per unit
These costs vary in total with production volume
Selling and administrative costs based on sales volume of units
Commissions to sales staff of price to retailer
Shipping $ per unit
Advertising and promotion $ per unit
Administrative staff salaries, depreciation on office equipment, etc $ per unit
These costs vary in total with sales volume.
For :
What is the materials cost at units?
What is the materials cost at units?
What is the total variable cost at units?
What is the total variable cost at units?
What is the fixed manufacturing cost at units?
What is the fixed manufacturing cost at units?
What is the fixed manufacturing cost at units?
What is the total fixed cost at units?
What is the total fixed cost at units?
What is the contribution margin per unit?
What is the contribution margin if units are sold?
What is the contribution margin if units are sold?
What is the profit at the break even volume?
What is the contribution margin at the break even volume?
What is the break even volume?
What is the profit at units above break even?
What is the profit at units below the break even?
What is the profit at units above break even?
What is the margin of safety at units above break even?
What is the sales volume required to give $ profit before tax? What is the sales volume required to give $ after tax? Assume a tax rate of
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