i need help with the section "required C"
Chay Integrative Case 5-72 (Algo) Cost Estimation, CVP Analysis and Decision Making (LO 5-4.5,9) Luko 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, Bubbs, to sell in vending machines. The product, which sells for $6.00 per case, has not had the market success the managers expected and the company is considering dropping Bubbs The product line income statement for the past 12 months follows: $ 14,70,65 $ 14,447,95 Revenue Costs Manufacturing costs Allocated corporate costs Product line margin Allowance for tax (0) Product line prorit (tess) 15,163, 135 (478,478) 95.95 82,783) All products at luke receive an allocation of corporate overhead costs, which is computed as 5 percent of product revenue. The 5 percent rate computed based on the most recent year's corporate cost as a percentage of revenue. Data on corporate costs and revenues for the past two years follow Corporate Revenue Corporate Overhead costs Most recent year 5 121,750,000 56,067,500 Previous year 77,700,000 5,109,590 222,400 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, Mr. Andre provides you with the following data on product costs for Bubbe Cases Production Costa 1 222,000 $1,164,340 2 224,700 1,185,840 1,194,495 263.000 1.220,035 250,450 1,212,339 252,000 1,233,105 227,750 1,200,211 8 254,700 1.251,200 9 1,249.738 10 260,150 1,261,637 257,700 1,266,272 12 26,700 1,256,63 4 2 346, Required: a. 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 Burke 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 eam 5 percent of sales after tax and corporate location 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 Bubb, how much will Luke's profits increase or decrease? Assume that fixed production costs can be avoided if Bubbs is dropped Complete this question by entering your answers in the tabs below. Required Required Required Required 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 (Round your minimum price per case to 2 decimal places and do not round your other intermediate calculations. Found your final angives up to the nearest whole unit) Show less Number of Chay Integrative Case 5-72 (Algo) Cost Estimation, CVP Analysis and Decision Making (LO 5-4.5,9) Luko 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, Bubbs, to sell in vending machines. The product, which sells for $6.00 per case, has not had the market success the managers expected and the company is considering dropping Bubbs The product line income statement for the past 12 months follows: $ 14,70,65 $ 14,447,95 Revenue Costs Manufacturing costs Allocated corporate costs Product line margin Allowance for tax (0) Product line prorit (tess) 15,163, 135 (478,478) 95.95 82,783) All products at luke receive an allocation of corporate overhead costs, which is computed as 5 percent of product revenue. The 5 percent rate computed based on the most recent year's corporate cost as a percentage of revenue. Data on corporate costs and revenues for the past two years follow Corporate Revenue Corporate Overhead costs Most recent year 5 121,750,000 56,067,500 Previous year 77,700,000 5,109,590 222,400 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, Mr. Andre provides you with the following data on product costs for Bubbe Cases Production Costa 1 222,000 $1,164,340 2 224,700 1,185,840 1,194,495 263.000 1.220,035 250,450 1,212,339 252,000 1,233,105 227,750 1,200,211 8 254,700 1.251,200 9 1,249.738 10 260,150 1,261,637 257,700 1,266,272 12 26,700 1,256,63 4 2 346, Required: a. 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 Burke 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 eam 5 percent of sales after tax and corporate location 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 Bubb, how much will Luke's profits increase or decrease? Assume that fixed production costs can be avoided if Bubbs is dropped Complete this question by entering your answers in the tabs below. Required Required Required Required 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 (Round your minimum price per case to 2 decimal places and do not round your other intermediate calculations. Found your final angives up to the nearest whole unit) Show less Number of
