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I need help on the section requjres A Integrative Case 5-72 (Algo) Cost Estimation, CVP Analysis, and Decision Making (LO 5.4.5,9) Luke Corporation produces a
I need help on the section "requjres A" Integrative Case 5-72 (Algo) Cost Estimation, CVP Analysis, and Decision Making (LO 5.4.5,9) Luke Corporation produces a variety of products, each within their own division Last year, the managers at Luke developed and began marketing a new chewing gum, Bobbs, to sell in vending machines. The product, which sells for $6.00 per cate, hac not had the market success that managers expected and the company is considering dropping Bubbs. The product-line income statement for the past 12 months follows $ 14,704,650 Revenu Costs Manufacturing costs Allocated corporate costs) Product line margin Allowance for tax (0) Product line profit (loss) $14,417,195 73523 15,183,123 5 (473,478) 95,695 5 (882,783) All products at Luke receive an allocation of corporate overhead costs, which is computed as 5 percent of product revenue. The 5 percent rate is computed based on the most recent year's corporate Couns o percentage of revenue Data on corporate costs and revenues for the past two years follow Corporate Corporate Overhead Costs Most recent year $ 121,750,000 $ 6,017,500 Previous year 77.700.000 5,109,500 Roy O Andre, the product manager for Bubbs, is concerned about whether the product will be dropped by the company and has employed you as a financial consultant to help with some analysis. In addition to the information given, Me Andre provides you with the following date on product costs for Bubbs: Month Cases Production costs 1 227,000 51,164,340 2 224,700 1,185,540 3 1,194,493 4 200.000 1,210,03s 250,450 1,212,339 E 252.000 1.233,185 227,750 1,200,211 8 254,700 1,251,206 9 246,300 1,249,730 10 -260, 150 1,261,637 257.78 1,265,272 255,700 5 7 Required: .. Bunk Stores has requested a quote for a special order of Bubbs This order would not be subject to any corporate allocation and would not affect corporate costs). What is the minimum peice Mr Andre can offer Bunk without reducing profit any further? b. How many cases of Bubbs does Luke have to sell in order to break even on the product? c. Suppose Luke has a requirement that all products have to earn 5 percent of sales after tax and corporate allocations, or they will be dropped. How many cases of Bubbs does Mr Andre need to sell to avoid seeing Bubbs dropped? d. Assume all costs and prices will be the same in the next year If Luke drops Bubbs, how much will Luke's profits increase or decrease? Assume that fored production costs can be avoided It Bubbs is dropped Complete this question by entering your answers in the tabs below. Required Required Required Required Bunk Stores has requested a quote for a special order of Bubbs. This order would not be subject to any corporate allocation (and would not affect corporate costs). What is the minimum price Mr. Andre can offer Bunk without reducing profit any further? (Round your answer to 2 decimal places..., 32.21) Minimum pc per case Required)
I need help on the section "requjres A"
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