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please help its accounting please solve as soon as possible!! National Paints currently sells paints. During a typical month, the stand reports a profit of
please help its accounting
National Paints currently sells paints. During a typical month, the stand reports a profit of $90,000 with sales of $500,000, fixed costs of $210,000, and variable costs of $6,4 per paint. Next year, the company plans to start selling lotions for $30 per unit. Lotions will have a variable cost of $7.2 and new equipment and personnel to produce lotions will increase monthly fixed costs by $66,000. Initial sales of lotions should total 50,000 units. Most of the lotion sales are anticipated to come from current paint purchasers, therefore, monthly sales of paints are expected to decline to $200,000. After the first year of lotion sales, the company president believes that paint sales will increase to $120,000 and lotion sales will increase to $300,000. Required: 1. Determine the monthly breakeven sales in dollars before adding lotions, 2. Determine the monthly breakeven sales during the first year of lotion sales, assuming a constant siles mix of I paint and 2 units of lotions. 3. Compute the units of margin of safety for each single product based on the second-year expectations, Comment on your answer. 4. Compute the degree of operating leverage of the company during the second year and comment, Assume no change in fixed cost and the variable cost is expected to be 25% of sales please solve as soon as possible!!
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