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Need it right now ! Help! Question 2 Projected cost information for a new product to be produced by Alpha manufacturing is as follows: Expected
Need it right now ! Help! Question 2 Projected cost information for a new product to be produced by Alpha manufacturing is as follows: Expected variable unit costs: Direct materials 7.40 Direct labor 6.12 Manufacturing supplies 2.80 Selling costs 3.68 Annual fixed costs: Taxes on property used 6.680 Depreciation on building and equipment 22,480 Advertising 52.960 Other 1.760 The product is to be sold for 38. Required: a) The new product's sales are expected to be 20.000 units. Using the information provided, compute the new selling price that the company must set to obtain a net profit of 226.120. (25%) b) Compute the number of units that must be sold if advertising costs increase by 31,460 and a target profit of 130,000 is to be obtained. (20%) c) The most in annual sales that could be projected is 24,000 units. Determine the added amount that could be spent on fixed advertising costs if the highest possible selling price that management believes can be charged is 40 and it there is a target net profit of 250,000. (25%) d) Briefly explain the benefits of using the Contribution Margin Income Statement in product planning. (15%) e) CVP is used in short-term planning and many companies choose options that maximise the short-term profits. However, there are also qualitative factors which may be taken into account prior to making a decision. Briefly state some of these qualitative factors. (15%)
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