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How to do this question? The SEFAG Printing and Publishing Company produce one type of book for children's market. It manufactures and sells this book
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The SEFAG Printing and Publishing Company produce one type of book for children's market. It manufactures and sells this book (and no others) in China. The following table shows the data of the previous three years: Sales estimated Sales price (S/Book) Raw material cost ($/book) Royalty (S/book) Labor costs ($/book) Fixed cost Year 2014 30,000.00 $ 17.00 2 3 2.3 50,000.00 Year 2015 23,000.00 $ 21.00 2.3 3.61 2.8 55,000.00 Year 2016 43,891.79 $ 15.50 2 2.8 2.11 48,400.00 The manager noticed that on Year 2014 and 2015 the company has sold all what they have printed. However, on 2016 just 87% of their production has been sold. 1. In 2017, the company fixed cost has been increased by 5% and is expected to increase from 10% to 60%. Variable cost on the other hand, has increase by 15%, but it expected to increase from 20% to 40%. If the manager wants to maintain profit of at least $180,000, what is the critical situation will face the company? The SEFAG Printing and Publishing Company produce one type of book for children's market. It manufactures and sells this book (and no others) in China. The following table shows the data of the previous three years: Sales estimated Sales price (S/Book) Raw material cost ($/book) Royalty (S/book) Labor costs ($/book) Fixed cost Year 2014 30,000.00 $ 17.00 2 3 2.3 50,000.00 Year 2015 23,000.00 $ 21.00 2.3 3.61 2.8 55,000.00 Year 2016 43,891.79 $ 15.50 2 2.8 2.11 48,400.00 The manager noticed that on Year 2014 and 2015 the company has sold all what they have printed. However, on 2016 just 87% of their production has been sold. 1. In 2017, the company fixed cost has been increased by 5% and is expected to increase from 10% to 60%. Variable cost on the other hand, has increase by 15%, but it expected to increase from 20% to 40%. If the manager wants to maintain profit of at least $180,000, what is the critical situation will face the company
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