Cost Details:

• Fixed Costs:
  • Manufacturing: $800,000
  • Administrative: $400,000

• Variable Costs per Unit:
  • Direct Materials: $30
  • Direct Labor: $20

Requirements:

• Conduct a sensitivity analysis for changes in variable costs (increase/decrease by 10%).
• Calculate the impact on total costs and profitability.
• Present the analysis in a detailed table format.
• Discuss the implications of cost structure changes on pricing strategy.