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Continuing from the prior problem, Gideon is studying the possibility of expanding with a new factory because demand for their product is more than they
- Continuing from the prior problem, Gideon is studying the possibility of expanding with a new factory because demand for their product is more than they can service in the old factory. If they proceed with this plan their annual fixed costs will increase to $1,500,000. Their variable cost per unit and selling price per unit will stay the same. What is Gideons new breakeven point with the new factory?
- Instead of expanding into the new plant, what are some other alternatives Gideon could use to meet this increased demand. Mention at least one alternative and talk about a strength of this alternative and a weakness of this alternative.
- Dexter Corporation projects the following units and selling prices:
Year 1 Year 2 Year 3 Year 4
Unit sales 1,000 1,500 2,000 3,000
Selling price per unit $10 $12 $15 $18
Please calculate Dexters projected or proforma sales.
4. Continuing from the prior problem, Dexter has the following fixed cost per year and variable cost per unit each year:
Year 1 Year 2 Year 3 Year 4
Annual fixed costs $2,000 $2,100 $2,200 $2,400
Variable costs per unit $5 $6 $8 $9
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