Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 12-2 CB is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth

image text in transcribed
Problem 12-2 CB is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $ 1.600.000 .The booth will be open CB also plans to add a new product line, Basehits, which will have a variable cost of She will continue to sell the existing product, Noerrors, which will have a variable cost of CB believes that the salesperson will spend approximately : 240 $1,440 $800 60 180 hours during the trade show per package per package hours selling Noerrors and hours selling Basehits Assume that the foxed costs wil be alocated based on selling hours for each product. Hint: Calculate fixed cost rate per hour so you can spread fixed costs to each product Required 1. Determine the estimated total cost (including fixed and variable costs) and cost per unit of each product, assuming that the salesperson is able to sell 640 units of Noerrors salesperson is able to sell 400 units of Basehits 2. Determine the estimated total cost (including faxed and variable costs) and cost per unit of each product, assuming that the salesperson is able to sell 1600 units of Noerrors sales person is able to sell 800 units of Basehits 3. Explain why the cost per unit figures calculated in Requirement a are different from the amounts calculated in Requirement b. Also explain how the differences in estimated cost per unit will affect pricing decisions

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing IT Infrastructures For Compliance

Authors: Martin Weiss, Michael G. Solomon

2nd Edition

1284090701, 978-1284090703

More Books

Students also viewed these Accounting questions

Question

Understand developments in knowledge creation and management

Answered: 1 week ago

Question

Explain key ideas of workplace learning

Answered: 1 week ago

Question

Explain how HRD may be implemented

Answered: 1 week ago