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Please help The following information is available for year 1 for Pepper Products: Sales revenue (200,000 units) Manufacturing costs $2,850,000 Variable cash costs Fixed cash
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The following information is available for year 1 for Pepper Products: Sales revenue (200,000 units) Manufacturing costs $2,850,000 Variable cash costs Fixed cash costs Depreciation (fixed) $ 168,000 142,400 327,600 999,000 Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation 422,400 149,600 509,200 74,800 $2,793,000 $ 57,000 Total costs Operating profits All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to fall by 5 percent, but prices are expected to rise by 15 percent. Material costs per unit are expected to increase by 12 percent. Other unit variable manufacturing costs are expected to decrease by 10 percent per unit. Fixed cash costs are expected to increase by 4 percent. Variable marketing costs will change with unit volume. Administrative cash costs are expected to increase by 5 percent. Inventories are kept at zero. Pepper Products operates on a cash basisStep by Step Solution
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