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Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below for the month ended
Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below for the month ended October 31, 2022: All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. The company has an extremely effective lean production system, so there is no beginning or ending work in process or finished goods inventories. Piedmont Fasteners is doing an analysis of potentially expanding, reducing, or eliminating some of its product lines. The company believes it can increase sales by 50,000 units for one of its products given the current advertising budget already included in overall company fixed expenses but is not sure which if any product to advertise. Wes Chan, Vice President of Marketing has hired your consulting firm to calculate the base case and present the best alternative for the future. Be sure to address the following: O The over-all break-even point in dollar sales for the company. - The break-even point in unit sales for each product. o A contribution format income statement showing the base case. o A contribution format income statement showing your recommendation. Hint: You can eliminate any or multiple product lines but you can only increase the sales in one product line. If you eliminate a product line the fixed expenses for that line will go away but expenses related to the whole company will remain the same
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