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Problem 4 (15 points) PNG electric company manufactures a number of electric products. Rechargeable light is one of the PNG's products that sells for CAD
Problem 4 (15 points) PNG electric company manufactures a number of electric products. Rechargeable light is one of the PNG's products that sells for CAD 180/unit. Total fixed expenses related to rechargeable electric light are CAD 270,000 per month and variable expenses involved in manufacturing this product are CAD 126 per unit. Monthly sales are 8,000 rechargeable lights. Required: 1. Compute break-even point of the company in dollars and units. Illustrate your answers graphically. 2. According to a research conducted by sales department, a 10% reduction in sales price will result in 25% increase in unit sale. Calculate the profit or loss and justify if unit sale increased indeed by 25%. 3. Compute the number of rechargeable lights to be sold to earn a net operating income of CAD 189,000 per month (use original data)
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