Q1: Cost behaviour and Cost Profit Volume Analysis Pfizer firm is developing a new vaccine for the latest strain of Covid 19 called Lambda, first identified in Peru, and now spreading in South America. It is highly infectious and more resistant to vaccines than the original version of the virus that emerged from Wuhan, China. The company has received a special order from a South American country last week and plans to produce 22,000,000 doses of the vaccine with an average selling price of $6 per dose in 2022. The budgeted weekly quantities for materials, labour, total costs, and selling volume and values for the next year are predicted in Table 1. Table 1: Predicted weekly costs, sales, and production data Week Mat A Volume (does) Mat B (kg) D Lab Hrs. Mach Hrs. Total costs Sale value (kg) 1 165,000 15 17 35 22 2 188,000 16 19 39 25 3 18 22 38 26 4 18 21 42 27 5 19 23 45 29 6 21 25 47 31 32 7 21 25 51 8 20 23 47 34 9 22 27 54 34 10 20 28 56 35 11 23 27 46 35 12 23 28 47 36 $292,500 S327,000 $319,500 $350,000 $390,000 $420,000 $430,000 $395,000 $450,000 $470,000 $460,000 $470,000 $480,000 $520,000 $540,000 $530,000 $560,000 S610,000 $590,000 $580,000 $560,000 $610,000 $620,000 183,000 207,000 224,000 248,000 247,000 233,000 256,000 283,000 279,000 285,000 293,000 318,000 310,000 328,000 329,000 382,000 360,000 352,000 339,000 375,000 385.000 5990,000 S1,128,000 $1,098,000 $1,242,000 $1,344,000 $1,488,000 $1,482,000 $1,398,000 $1,536,000 $1,698,000 S1,674,000 $1,710,000 $1.758,000 $1,908,000 $1,860,000 $1,968,000 $1,974,000 $2,292,000 $2,160,000 $2,1 12,000 $2,034,000 $2,250,000 $2,310,000 13 24 29 48 37 14 26 31 40 15 27 32 41 16 26 36 42 17 28 33 42 18 31 43 81 91 918 19 29 59 45 20 32 58 45 21 56 46 22 47 23 47 24 32 38 64 49 25 32 39 64 49 26 38 46 50 72 62 27 39 51 32 37 28 41 64 52 29 33 40 67 53 30 32 40 74 54 36 43 72 55 31 32 42 70 56 35 40 49 90 57 33 34 38 46 76 58 35 39 44 80 59 36 36 45 77 59 37 42 48 81 60 38 42 50 86 62 396,000 421,000 483,000 403,000 432,000 416,000 452,000 449,000 436,000 544,000 482,000 497,000 499,000 504,000 537,000 520,000 537,000 528,000 560,000 574,000 612,000 590,000 662,000 618,000 650,000 670,000 680,000 640,000 639,000 22,000,000 S639,000 $650,000 $770,000 S650,000 $680,000 S675,000 $740,000 $720,000 $700,000 5870,000 $770,000 $790,500 $795,000 $820,000 $860,000 $830,000 S850,500 $837,000 $900,000 $906,000 $965,000 $920,000 SL.000,000 $980,000 $990,000 $998,000 $994,000 $987,500 $988,500 35,250,000 $2,376,000 $2,526,000 $2,898,000 $2,418,000 $2,592,000 $2,496,000 $2.712,000 $2,694,000 $2,616,000 $3,264,000 $2,892,000 $2,982,000 $2,994,000 $3,024,000 $3,222,000 $3,120,000 $3,322,000 $3,168,000 $3,360,000 $3,444,000 $3,672,000 $3,540,000 $3,972,000 $3,708,000 $3,874,000 $3,875,000 $3,974,000 $3,976,000 $3,875,000 132,000,000 39 41 50 82 64 40 42 51 85 65 41 42 83 65 42 44 53 53 54 89 65 43 45 90 66 44 48 57 95 68 45 52 93 70 46 46 46 | | 55 99 73 47 48 98 74 58 59 48 49 98 75 49 52 62 99 76 53 63 97 TT 50 51 98 52 51 51 1,750 65 60 2,100 98 78 79 2.660 Total 3,570 2 6 2 7 2 8 2 9 2 10 2 11 2 2 12 2 13 2 6 How much is the total breakeven in units for the year using volume (doses) of productions as the single (regression) cost driver? 7 How much is the total targeted sale in units for the year if the company wants $100,000,000 net profit and using volume (doses) of productions as the single (regression) cost driver? 8 How much is the total targeted sale in units for the year if the company wants a $50,000,000 contribution margin (CM) using volume (doses) of productions as the single (regression) cost driver? 9 How much is the total fixed cost for the year, using volume (doses) of productions as the single (regression) cost driver? 10 How much is the total variable cost for the year, using volume (doses) of productions as the single (regression) cost driver (based on current demand? 11 How much is the total fixed cost for the year using all five drivers (regression) listed in the table? 12 How much is the adjusted Rsquare using all five drivers (regression) listed in the table (with four decimal places)? 13 How much is the total production cost of 30,000,000 doses of the vaccine in the year using volume (doses) of productions as the single (regression) cost driver for the cost function? 14 How much is the total fixed cost for the year, using the High and Low method and if the volume of productions (doses) is the only relevant cost driver? How much is the variable cost per unit (volume), using the High and Low method and if the volume of productions (doses)' is the only relevant cost driver (with four decimal places)? 16 How much is the breakeven point in value for the year using the High and Low method and assuming that the volume of productions (doses) is the only relevant cost driver (use actual sale price per unit)? 17 How much is the breakeven point in units for the year using the High and Low method and assuming that the volume of productions (doses) is the only relevant cost driver? 18 How much is the margin of safety in value for the year using the High and Low method and assuming that the volume of productions (doses) is the only relevant cost driver (using current estimations)? 19 How much is the total production cost for the year if you want to produce 25,000,000 doses of vaccine and use your best single cost function, which you developed in answering the above questions based on individual regression methods? 14 2 15 15 2 16 2 17 2 18 2 19 2 Q1: Cost behaviour and Cost Profit Volume Analysis Pfizer firm is developing a new vaccine for the latest strain of Covid 19 called Lambda, first identified in Peru, and now spreading in South America. It is highly infectious and more resistant to vaccines than the original version of the virus that emerged from Wuhan, China. The company has received a special order from a South American country last week and plans to produce 22,000,000 doses of the vaccine with an average selling price of $6 per dose in 2022. The budgeted weekly quantities for materials, labour, total costs, and selling volume and values for the next year are predicted in Table 1. Table 1: Predicted weekly costs, sales, and production data Week Mat A Volume (does) Mat B (kg) D Lab Hrs. Mach Hrs. Total costs Sale value (kg) 1 165,000 15 17 35 22 2 188,000 16 19 39 25 3 18 22 38 26 4 18 21 42 27 5 19 23 45 29 6 21 25 47 31 32 7 21 25 51 8 20 23 47 34 9 22 27 54 34 10 20 28 56 35 11 23 27 46 35 12 23 28 47 36 $292,500 S327,000 $319,500 $350,000 $390,000 $420,000 $430,000 $395,000 $450,000 $470,000 $460,000 $470,000 $480,000 $520,000 $540,000 $530,000 $560,000 S610,000 $590,000 $580,000 $560,000 $610,000 $620,000 183,000 207,000 224,000 248,000 247,000 233,000 256,000 283,000 279,000 285,000 293,000 318,000 310,000 328,000 329,000 382,000 360,000 352,000 339,000 375,000 385.000 5990,000 S1,128,000 $1,098,000 $1,242,000 $1,344,000 $1,488,000 $1,482,000 $1,398,000 $1,536,000 $1,698,000 S1,674,000 $1,710,000 $1.758,000 $1,908,000 $1,860,000 $1,968,000 $1,974,000 $2,292,000 $2,160,000 $2,1 12,000 $2,034,000 $2,250,000 $2,310,000 13 24 29 48 37 14 26 31 40 15 27 32 41 16 26 36 42 17 28 33 42 18 31 43 81 91 918 19 29 59 45 20 32 58 45 21 56 46 22 47 23 47 24 32 38 64 49 25 32 39 64 49 26 38 46 50 72 62 27 39 51 32 37 28 41 64 52 29 33 40 67 53 30 32 40 74 54 36 43 72 55 31 32 42 70 56 35 40 49 90 57 33 34 38 46 76 58 35 39 44 80 59 36 36 45 77 59 37 42 48 81 60 38 42 50 86 62 396,000 421,000 483,000 403,000 432,000 416,000 452,000 449,000 436,000 544,000 482,000 497,000 499,000 504,000 537,000 520,000 537,000 528,000 560,000 574,000 612,000 590,000 662,000 618,000 650,000 670,000 680,000 640,000 639,000 22,000,000 S639,000 $650,000 $770,000 S650,000 $680,000 S675,000 $740,000 $720,000 $700,000 5870,000 $770,000 $790,500 $795,000 $820,000 $860,000 $830,000 S850,500 $837,000 $900,000 $906,000 $965,000 $920,000 SL.000,000 $980,000 $990,000 $998,000 $994,000 $987,500 $988,500 35,250,000 $2,376,000 $2,526,000 $2,898,000 $2,418,000 $2,592,000 $2,496,000 $2.712,000 $2,694,000 $2,616,000 $3,264,000 $2,892,000 $2,982,000 $2,994,000 $3,024,000 $3,222,000 $3,120,000 $3,322,000 $3,168,000 $3,360,000 $3,444,000 $3,672,000 $3,540,000 $3,972,000 $3,708,000 $3,874,000 $3,875,000 $3,974,000 $3,976,000 $3,875,000 132,000,000 39 41 50 82 64 40 42 51 85 65 41 42 83 65 42 44 53 53 54 89 65 43 45 90 66 44 48 57 95 68 45 52 93 70 46 46 46 | | 55 99 73 47 48 98 74 58 59 48 49 98 75 49 52 62 99 76 53 63 97 TT 50 51 98 52 51 51 1,750 65 60 2,100 98 78 79 2.660 Total 3,570 2 6 2 7 2 8 2 9 2 10 2 11 2 2 12 2 13 2 6 How much is the total breakeven in units for the year using volume (doses) of productions as the single (regression) cost driver? 7 How much is the total targeted sale in units for the year if the company wants $100,000,000 net profit and using volume (doses) of productions as the single (regression) cost driver? 8 How much is the total targeted sale in units for the year if the company wants a $50,000,000 contribution margin (CM) using volume (doses) of productions as the single (regression) cost driver? 9 How much is the total fixed cost for the year, using volume (doses) of productions as the single (regression) cost driver? 10 How much is the total variable cost for the year, using volume (doses) of productions as the single (regression) cost driver (based on current demand? 11 How much is the total fixed cost for the year using all five drivers (regression) listed in the table? 12 How much is the adjusted Rsquare using all five drivers (regression) listed in the table (with four decimal places)? 13 How much is the total production cost of 30,000,000 doses of the vaccine in the year using volume (doses) of productions as the single (regression) cost driver for the cost function? 14 How much is the total fixed cost for the year, using the High and Low method and if the volume of productions (doses) is the only relevant cost driver? How much is the variable cost per unit (volume), using the High and Low method and if the volume of productions (doses)' is the only relevant cost driver (with four decimal places)? 16 How much is the breakeven point in value for the year using the High and Low method and assuming that the volume of productions (doses) is the only relevant cost driver (use actual sale price per unit)? 17 How much is the breakeven point in units for the year using the High and Low method and assuming that the volume of productions (doses) is the only relevant cost driver? 18 How much is the margin of safety in value for the year using the High and Low method and assuming that the volume of productions (doses) is the only relevant cost driver (using current estimations)? 19 How much is the total production cost for the year if you want to produce 25,000,000 doses of vaccine and use your best single cost function, which you developed in answering the above questions based on individual regression methods? 14 2 15 15 2 16 2 17 2 18 2 19 2