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I need help with question 2 and 3 only please help with explanation. thanks You are currently trying to decide between two cost structures for
I need help with question 2 and 3 only please help with explanation. thanks
You are currently trying to decide between two cost structures for your business: one that has a greater proportion of short-term fixed costs and another that is more heavily weighted to variable costs. Estimated revenue and cost data for each alternative are as follows: Cost Structure Alternative #1 Alternative #2 Selling price per unit 50 50 Variable cost per unit 25 20 75,000 70,000 Short-term fixed costs/year Required: 1. What sales volume, in units, is needed for the total costs in each cost-structure alternative to be the same? Sales volume (in units) 2. Suppose your profit goal for the coming year is 10% of sales (i.e., operating profit sales F 10%). What sales level in units is needed under each alternative to achieve this goal? Alternative 1 Alternative 2 Required sales volumeStep by Step Solution
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