Johnson and Gomez, Incorporated, is a small firm involved in the production and sale of electronic business products. The company is well known for its attention to quality and innovation. During the past 15 months, a new product has been under development that allows users improved access to e-rmail and video images. Johnson and Gomez code named the product the Wireless Wizard and has been quietly designing two models: Basic and Enhanced. Development costs have amounted to $184,500 and $265,500, respectively. The total market demand for each model is expected to be 42,000 units, and management anticipates being able to obtain the following market shares: Basic, 25 percent; Enhanced, 20 percent. Forecasted data follow. "Computed on the basis of sales dollars. Since the start of development work on the Wireless Wizard, advances in technology have altered the market somewhat, and management now believes that the company can introduce only one of the two models. Consultants confirmed this fact not too long ago, with Johnson and Gomez paying $34,700 for an In-depth market study. Sales salaries (excluding commlssion) will be $86,500 no matter which product is sold. The marketing and advertising costs Indlcated for each product are incurred only if that product is sold. Other fixed overhead is expected to be the same, regardless of which product is introduced. Required: 1. Compute the unit contribution margin for both models. Note: Round your answers to 2 decimal places. 2. Which of the following should be ignored in making the product-introduction decision? Note: You may select more than one onswer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. Check my work is not available. ? Market stucty ? Marketing and Ndvertising Fixed menufacturing coverhead ? Variable manufacturng coverhead 3-a. Prepare a financial analysis and determine which of the two models should be introduced. 3-b. The company would be advised to select the Enhanced model or Basic model. Complete this question by entering your answers in the tabs below. Prepare a financlal analysis and determine which of the two models should be Introduced. Note: Round intermediate calculations to 2 decimal places. The company would be advised to select the Enhanced model or Basic model. 4. What other factors should Johnson and Gomez, Incorporated, consider before a final decision is made? Note: You moy select more thon one answer. Single click the box with the question mark to produce o check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be outomatically groded as incorrect. Check my work is not avallable. Possibility of merger of the firm with a bigger player Growth potential of the Bisic and Cnhanced models Competitive products in the marketplace Aesthetlc differences between the two products Break-even points Data validity Previous year's sales trends Production feasibility Effects, if arry, on existing product sales
