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Chester has a new design for their product City next round that can reduce their material cost of producing units from $8.14 10 57.32. Chest pass on half of art cost savings by cutting the current price to customers. For smplicity: - Use current labor costs of 5404 - Assume all period costs as reported on Chester's income Stement (Annual Rpt Pg 2) wilman the same Determine how many unts (000) of product City would need to be sold next round to break even on the product Select 1 Submit Anow 1002 units sunts 01.062 units 1.302 units 729 units 948 units 2024 Income Statement Product Name Ace Awe Art Ant NA NA NA NA Total Common Size Sales $38,121 $28,764 $26,257 $48,281 $0 SO $0 $0 $141424 100% Variable Costs: Direct Labor $8,087 $5,009 $2.942 $9,794 $0 $0 SO $25,831 18.3% Direct Material $13,318 $9,657 58,673 $16,429 $0 $ $ $ $0 SO SO $48.076 34% Inventory Carry $0 $0 $19 $2,043 $0 SO SO 50 $2,061 1.5% Total Variable $21,405 $14,665 $11,633 $28,266 30 SO SO $0 $75.969 53.7% Contribution Margin $16,716 $14,099 $14,624 $20,016 $0 SO $0 $0 $65,454 46.3% Period Costs: Depreciation $1,262 $1,238 $3,934 $3,411 SO $0 $9,845 7% R&D $781 $864 $734 5527 SO SO $0 $2,906 2.1% $2.000 $2,000 $2,000 $0 $0 $0 $8,000 5.7% Promotions Sales $2,000 $2,000 $2.000 $2,000 $2,000 $0 8 8 8 8 8 8 8 $ % % % % % 8 $0 $8,000 5.7% 3 8 Admin $302 $296 $270 5496 $0 $0 30 $1.454 1% Total Period $5,435 $6,398 $8,938 $5,435 SO 50 $0 $30,206 21.4% Net Margin $10.281 $7,701 $5,685 $11,581 SO $0 $35,249 24.9% Other $11.210 7.9% EBIT $24.039 17% $90 0.1% $3,510 2.5% Short Term interest Long Term interest Taxes Profit Sharing $7.151 Definitions: Sales: Unit sales times list price Direct Labor: Labor costs incurred lo produce the product that was sold Inventory Carry Cost: the cost to carry unsold goods in inventory Depreciation: Calculated on straight line 15-year depreciation of plant value R&D Costs: R&D department expenditures for each product Admin Administration overhead is estimated at 15% of sales Promotions: The promotion budget for each product Sales: The sales force budget for each product Other: Charges not included in other categories such as Foes, Write Offs, and TOM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting foes your Instructor might assess. Write-offs include the loss you might experience when you soll capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. COOKIE SETTINGS Interest expense based on last year's current debt, including 5.1% $266 0.2% Net Profit $13.014 9.2% Variables Margins Contacts Chester has a new design for their product City next round that can reduce their material cost of producing units from $8.14 10 57.32. Chest pass on half of art cost savings by cutting the current price to customers. For smplicity: - Use current labor costs of 5404 - Assume all period costs as reported on Chester's income Stement (Annual Rpt Pg 2) wilman the same Determine how many unts (000) of product City would need to be sold next round to break even on the product Select 1 Submit Anow 1002 units sunts 01.062 units 1.302 units 729 units 948 units 2024 Income Statement Product Name Ace Awe Art Ant NA NA NA NA Total Common Size Sales $38,121 $28,764 $26,257 $48,281 $0 SO $0 $0 $141424 100% Variable Costs: Direct Labor $8,087 $5,009 $2.942 $9,794 $0 $0 SO $25,831 18.3% Direct Material $13,318 $9,657 58,673 $16,429 $0 $ $ $ $0 SO SO $48.076 34% Inventory Carry $0 $0 $19 $2,043 $0 SO SO 50 $2,061 1.5% Total Variable $21,405 $14,665 $11,633 $28,266 30 SO SO $0 $75.969 53.7% Contribution Margin $16,716 $14,099 $14,624 $20,016 $0 SO $0 $0 $65,454 46.3% Period Costs: Depreciation $1,262 $1,238 $3,934 $3,411 SO $0 $9,845 7% R&D $781 $864 $734 5527 SO SO $0 $2,906 2.1% $2.000 $2,000 $2,000 $0 $0 $0 $8,000 5.7% Promotions Sales $2,000 $2,000 $2.000 $2,000 $2,000 $0 8 8 8 8 8 8 8 $ % % % % % 8 $0 $8,000 5.7% 3 8 Admin $302 $296 $270 5496 $0 $0 30 $1.454 1% Total Period $5,435 $6,398 $8,938 $5,435 SO 50 $0 $30,206 21.4% Net Margin $10.281 $7,701 $5,685 $11,581 SO $0 $35,249 24.9% Other $11.210 7.9% EBIT $24.039 17% $90 0.1% $3,510 2.5% Short Term interest Long Term interest Taxes Profit Sharing $7.151 Definitions: Sales: Unit sales times list price Direct Labor: Labor costs incurred lo produce the product that was sold Inventory Carry Cost: the cost to carry unsold goods in inventory Depreciation: Calculated on straight line 15-year depreciation of plant value R&D Costs: R&D department expenditures for each product Admin Administration overhead is estimated at 15% of sales Promotions: The promotion budget for each product Sales: The sales force budget for each product Other: Charges not included in other categories such as Foes, Write Offs, and TOM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting foes your Instructor might assess. Write-offs include the loss you might experience when you soll capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. COOKIE SETTINGS Interest expense based on last year's current debt, including 5.1% $266 0.2% Net Profit $13.014 9.2% Variables Margins Contacts