MANAGERIAL ACCOUNTING Cost Behavior and and Cost-Volume-Profit Analysis:

I could use the assistance with questions 5-8 using the data (in bold) from questions 1-4.

1. Select a Product that you would like to manufacture (NFL Team Jersey).

2. Determine the selling price for your product and estimate your sales in units for 3 years. (selling price $10 and no of sells is 100000 year on year for next 3 year)

3. List at least 8 costs that your company will incur. You must include multiple variable costs, fixed costs, and mixed costs. Please explain why you classified each cost in the manner that you did.

Fixed cost:

Yearly machine maintenance: $1000 yearly this is fixed doesn't change with the no of shirt we are making

cost: (pencil paper) : $500 yearly this is fixed doesn't change with the no of shirt we are making

sell cost: $35000 doesnt depend up on the no of shirts

marketing cost : $5000 doesnt depend up on the no of shirts

fixed overhead : guard etc. $5000 yearly

Variable cost:

Rawmaterial: $1 per shirt will vary with shirts

Labour : $3 per shirt

Variable overhead( Oil ued in machine etc.) $0.5 per shirt

MIxed:

Power :

for running machine $0.5 per shirt

and general lighting purpoe : $1000 yearly this is used for general purpose which will be similar

4. For each of the costs that you listed above, please estimate the cost. Please keep in mind that variable costs are incurred per unit and fixed costs in total. Mixed costs have a variable and fixed cost component. (Done in question 3)

________________ Using Numbers and Data from Question Numbers 1-4..............

5. Calculate how many units of your product you will have to sell to break-even for the next 3 years.

6. Calculate the margin of safety in units for each of the 3 years based on your projections above.

7. In year 1, you are happy to break-even but as a group discuss what target profit you would like to make for Year 2 and 3? Based on your target profit, calculate how many units you would need to sell.

8. Realistically, do you feel manufacturing this product makes sense or is it too risky? You must justify your decision.