Luke Corporation produces a variety of products, each within their own division. Last year, the managers Luke developed and began marketing a new chewing guri, Babus, to sell in vending machines. The product, which sells for $550 per case, has not had the market success that managers expected, and the company is considering dropping Bubbs. The product-line income statement for the last month follows: $ 1,415,975 $ Revemme Costs Production costs Product-line margin Allowance for tax (ra20%) Product-line profit floss) $ (1,280,451) 135,524 (27,104.80) $ 108,419.20 Roy O. Andre, the product manager for Bubba, 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, Nir. Andre provides you with the following data on production costs for Buhbs. for the past 12 months: Month Cases Production Costs 1 2 3 4 5 8 7 8 220 000 219 200 218.900 235.000 239.900 241 000 222 200 249 200 240.800 254 800 249 500 267 450 $1.147.828 1,174 265 1.177.981 1.193.523 1,195,827 1,216,673 1,101.699 1.215.210 1.293.226 1.245.625 1249.760 1280 451 @ 10 12 Required: Respond to the following question. 1. How many cases of Bubbs does Luke have to sell in a single month in order to break even on the product? Use Regression in Excel to find the fixed and variable portions of the production costs. a Cases will be the X variable and Production Costs will be the Y variable. o Produce a line-fit plot with the regression output and with axes correctly labeled. o Submit your Excel file as part of the assignment. Round the variable cost per unit and total fixed cost you find in the regression to two decimal places to answer questions 1 and 3. Round your answer (breakeven number of cases) to the nearest whole number. Use this rounded number to answer question 2. 2. What is Bukhs current margin of safety percentage based on the most recent product-line income statement? (round your answer to two decimal points, i.e., XX.XX%) 3. Suppose Luke has a requirement that all products have te eam 7 percent of sales (after tax) per month or they will be dropped. How many cases of Bubbs does Mr. Andre need to sell in a month to avoid seeing Bubbs dropped? (round the number of cases to the nearest whole number) You should use Solver in Excel to answer this problem, although it is not required. . Luke Corporation produces a variety of products, each within their own division. Last year, the managers Luke developed and began marketing a new chewing guri, Babus, to sell in vending machines. The product, which sells for $550 per case, has not had the market success that managers expected, and the company is considering dropping Bubbs. The product-line income statement for the last month follows: $ 1,415,975 $ Revemme Costs Production costs Product-line margin Allowance for tax (ra20%) Product-line profit floss) $ (1,280,451) 135,524 (27,104.80) $ 108,419.20 Roy O. Andre, the product manager for Bubba, 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, Nir. Andre provides you with the following data on production costs for Buhbs. for the past 12 months: Month Cases Production Costs 1 2 3 4 5 8 7 8 220 000 219 200 218.900 235.000 239.900 241 000 222 200 249 200 240.800 254 800 249 500 267 450 $1.147.828 1,174 265 1.177.981 1.193.523 1,195,827 1,216,673 1,101.699 1.215.210 1.293.226 1.245.625 1249.760 1280 451 @ 10 12 Required: Respond to the following question. 1. How many cases of Bubbs does Luke have to sell in a single month in order to break even on the product? Use Regression in Excel to find the fixed and variable portions of the production costs. a Cases will be the X variable and Production Costs will be the Y variable. o Produce a line-fit plot with the regression output and with axes correctly labeled. o Submit your Excel file as part of the assignment. Round the variable cost per unit and total fixed cost you find in the regression to two decimal places to answer questions 1 and 3. Round your answer (breakeven number of cases) to the nearest whole number. Use this rounded number to answer question 2. 2. What is Bukhs current margin of safety percentage based on the most recent product-line income statement? (round your answer to two decimal points, i.e., XX.XX%) 3. Suppose Luke has a requirement that all products have te eam 7 percent of sales (after tax) per month or they will be dropped. How many cases of Bubbs does Mr. Andre need to sell in a month to avoid seeing Bubbs dropped? (round the number of cases to the nearest whole number) You should use Solver in Excel to answer this problem, although it is not required
