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Mr. Bob, now successfully running his business. His wife increased her Chanel and Gucci bag consumption which outweigh his current level of net income. Even
Mr. Bob, now successfully running his business. His wife increased her Chanel and Gucci bag consumption which outweigh his current level of net income. Even with his mother-in-law on his side, the purse consumption did not decrease. He fallen under the pressure from his wife to sell multiple products. Below is the breakdown of each product he is now forced to sell: Product Annual Expected Sales (units) Selling Price per Unit Variable Manufacturing Cost per Unit Variable Selling and Admin Expenses per Unit Spoiled wife chair 450,000 $26.50 $13.96 $1.41 Avoid a divorce Chair 1,500,000 $11.20 $7.95 $0.45 Therapy Chair 50,000 $42.50 $29.75 $3.40 To produce the three chairs, Bob Inc incurs a total fixed manufacturing overhead of $805,650 and fixed selling and administrative of $1,600,000. Required: a. Spoiled wife chair b. Avoid a divorce Chair c. Therapy Chair d. How many units of the How many units of the How many units of the are required to be sold to breakeven? are required to be sold to breakeven? are required to be sold to breakeven? What are the sales dollars required for the Therapy Chair in order to earn an after-tax income of $2,000,000 assuming a tax rate of
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