Jordan and Taylor are beginning to understand break-even analysis.

Selling price to Yumminess at $10 per tin. The cost is $8 per tin, which includes $6 of direct material and $1.50 of direct labor. Annual manufacturing overhead is estimated at $100,000 for the expected sales of 200,000 tins. Operating expenses are projected to be $80,000 annually.

After looking over the costs for manufacturing overhead and operating expenses, you approximate that 85% of manufacturing overhead and 20% of operating expenses are variable costs.

They are now discussing options with adjustments to costs and sales. As long as they keep bringing brownies, you keep turning out numbers. Jordan and Taylor are considering an advertising campaign for $40,000 annually. They expect this to increase sales by 5%. What would be the new break even in sales dollars? Yumminess wants to feature Chocolate Attack Brownies as a monthly special. The predicted sales volume is 50,000 tins. Yumminess will offering a reduced selling price and they want Jordan and Taylor to cut their selling pricing by 10%, citing that the volume will more than make up the difference. What will be the break-even point in tins during this sale?

Yumminess wants to feature Chocolate Attack Brownies as a monthly special. The predicted sales volume is 50,000 tins. Yumminess will offering a reduced selling price and they want Jordan and Taylor to cut their selling pricing by 10%, citing that the volume will more than make up the difference. What net income can Jordan and Taylor expect during this offer?

No of units of sale	200,000
Sale Price	10
Less:Variable Cost:
Direct material	6.000
Direct labour	1.500
Manufacturing Overhead (100,000 x 85%/200,000 units)	0.425
Operating Expenses (80,000 x 20%/200,000)	0.080
Total Variable cost	8.005
Contribution Margin	1.995
Fixed Cost:
Manufacturing Overhead (100,000 x 15%)	15,000.000
Operating Expenses (80,000 x 80%)	64,000.000
Total Fixed Cost	79,000.000
Break even sales units (Fixed cost/Contribution per unit)	39,598.997
When sale increased by 5% by annual advertisement cost
Sale Price (10 + 5%*10)	10.500
Less:Variable Cost:
Direct material	6.000
Direct labour	1.500
Manufacturing Overhead (100,000 x 85%/200,000 units)	0.425
Operating Expenses (80,000 x 20%/200,000)	0.080
Total Variable cost	8.005
Contribution Margin	2.495
Fixed cost:
Manufacturing Overhead (100,000 x 15%)	15,000.000
Operating Expenses (80,000 x 80%)	64,000.000
Annual Advertisement Campaign	40,000.000
Total Fixed cost	119,000.000
New break even (119,000/2.495)	47,695.391
Projected new sales volume	50,000.000
New Selling price (reduced by 10%)	9.000
Variable cost per unit	8.005
Contribution per unit	0.995
Fixed Cost	79,000.000
Break even sales units (Fixed cost/Contribution per unit)	79,396.985

Answer for question two is required in tin ... but mine as sales. Question three is still unanswered.